Fair Lending & Fair Servicing

Financial institutions’ increasing use of complex models, novel technologies (including AI) and alternative data, as well as the emergence of innovative loan products and servicing practices, have intensified the spotlight on compliance with fair lending and servicing laws.

The emphasis on fair lending and servicing by the Consumer Financial Protection Bureau (CFPB) — along with other federal regulators and state attorneys general — has created a prolonged period of tight government scrutiny. Orrick counsels the nation’s top banks, mortgage lenders, auto lenders, credit card issuers, fintech companies, and other consumer finance providers in traditional and emerging areas of fair lending and fair servicing.

Our team of experienced attorneys has been directly involved in major developments across fair lending and servicing policy, regulation, enforcement, and litigation. We are well-positioned to help clients handle the known issues, and more importantly, anticipate future trends and prepare strategies to address novel challenges.

We routinely represent and advise clients on a variety of significant matters, including:

  • Government enforcement actions, investigations, and other administrative proceedings
  • Federal and state agency fair lending and servicing examinations
  • Complex civil litigation involving intricate regulatory issues
  • Risk assessments and regulatory compliance reviews, including leveraging qualitative and quantitative support drawn from regression analyses, Bayesian Improved Surname Geocoding (BISG) proxy methodology and matched pair reviews
  • Comprehensive regulatory counseling and compliance advice to mitigate fair lending risk under the Equal Credit Opportunity Act (ECOA), Fair Housing Act (FHA), Section 1981 and other federal and state anti-discrimination and fair lending laws
  • Forward-looking fair lending compliance and monitoring programs, including those in emerging areas such as the alternative financial services space and the use of technology and innovation in lending
  • Issues related to the intersection of emerging technologies and innovation with fair lending and servicing laws and regulations, including alternative data, artificial intelligence and machine learning