FOR IMMEDIATE RELEASE
Oct. 4, 2022
Bank Lobby Lawsuit Seeks Right to Discriminate in Providing Financial Services
Wrong on the merits and at odds with big-bank promises
WASHINGTON-D.C. — A lawsuit filed by the Wall Street lobby attempts to use the increasing corrosion of the judiciary by right-wing judges to enshrine in law a right to discriminate, according to Americans for Financial Reform, a broad coalition of organizations that includes civil rights and racial justice groups.
The lawsuit led by the U.S. Chamber of Commerce and bank lobbyists, which aims to prevent the Consumer Financial Protection Bureau from using its existing authority to assess if banks engage in racial discrimination in the provision of financial services, is nothing but an attempt to stop this agency from doing the job Congress gave it.
“Suing the CFPB for the right to discriminate against people of color and alleging that it is operating outside of its statutory authority is absurd and raises red flags about how, exactly, these banks are doing business,” said Elyse Hicks, consumer policy counsel at Americans for Financial Reform. “The CFPB has clear authority, as the top consumer watchdog, to watch out for discrimination of all kinds in consumer finance, penalize offenders, and correct bank practices.”
The lawsuit, which includes the American Bankers Association, the Consumer Bankers Association and several Texas groups, also stands out for sheer hypocrisy and absurdity. The U.S. Chamber proclaimed itself “steadfast in our pursuit of equality of opportunity for Black Americans and other people of color” after the conviction of George Floyd’s murderers. But it’s now resorting to an expansive lawsuit to gut measures critical to progress.
Specifically, the lobby groups argue that CFPB does not have the authority, when supervising big banks, to apply its authority to stop unfair, deceptive, and abusive practices when it detects racial, religious, or other types of discrimination. They are attempting to use a recent Supreme Court decision, West Virginia vs. EPA, in which a right-wing majority sought to undermine regulators’ ability to protect the public, to beat back CFPB’s efforts.
As CFPB Director Rohit Chopra observed when updating the guidelines for supervisory exams, it is “unambiguously unfair” for a person to be denied access to a bank account because of religion or race. Other bank practices that could be discriminatory include advertising and pricing.
“With this lawsuit, the bank lobby has joined the disgraceful campaign of many groups and politicians that exploits racial grievance to stop the United States from facing up to the very real effects of persistent discrimination,” Hicks said. “The goal of big banks is simply to avoid having to face up to their own role in the historic wrong of structural racism, and the costs of that to their own bottom lines.”
The Wall Street lobby is also pursuing a goal they have failed to achieve since before the agency was created, namely subverting the funding mechanism for CFPB. Under the 2010 Dodd-Frank law, CFPB has an independent financing stream, just like other bank regulators, in order to provide a measure of insulation from political influence.
“Attacking the CFPB’s funding structure has nothing to do with any policy, discrimination or otherwise,” Hicks said. “The real goal of the big banks, when CFPB was created and now, is to destroy this agency and its mission of protecting consumers.”