Both agencies have authority to protect against discriminatory lending, including through the Equal Credit Opportunity Act. But the Dodd-Frank Act also authorizes the CFPB to conduct joint investigations with DOJ when it relates to fair lending.
The Justice Department "welcomes the new tools and resources the CFPB can bring to the fight against lending discrimination," said Thomas E. Perez, assistant attorney general for the Civil Rights Division, in a joint press release. "Cooperation between our two agencies promotes strong and effective civil rights enforcement, and today's agreement will further our ongoing collaborative efforts."
In the memorandum of understanding, both parties agreed to meet regularly on investigations and established strict confidentiality in sharing information.
The CFPB will also refer matters to the Justice Department—just as other bank regulators do—"when it has reason to believe that a creditor has engaged in a pattern or practice of lending discrimination" the bureau said. Such notifications include when an investigation is opened or a lawsuit is filed. The CFPB also noted that a referral to the Justice Department does not affect its authority to take its own enforcement action.
"Discrimination undermines equal access to credit," CFPB director Richard Cordray said in the release. "Today's agreement is a critical step to better protecting consumers from illegal and discriminatory lending practices."