We have never had a banking department issue an action against us for discrimination – until now. Last week, our banking department came after us for discriminating through “unfair acts or practices.” We think this is outrageous, as our firm is devoted to supporting communities of color. Our home office and branches are located, for the most part, in minority communities.
The baking department is citing their UDAAP examination and one that was done by the CFPB last year. It issued an administrative action. As the company’s Chief Compliance Officer, I can say we always had decent exam outcomes. Now, this is a bad mark and will cause not only regulatory risk but also reputation risk. With the permission of management, I sent you a redacted banking report that shows the alleged violations.
The crux of the issue comes down to whether the alleged violations were intentional or unintentional. We can provide evidence that any such alleged violations were totally unintentional. Our attorney is now working with the banking department to find a resolution.
Is it the case that unintentional “unfair acts or practices” are a violation of UDAAP guidelines?