Roberson v. Health Career Institute LLC
As courts have recognized for decades, discriminatory targeting is the act of directing predatory or otherwise harmful products or practices at certain groups, neighborhoods, or parts of a community. While “redlining” is the practice of financial institutions not lending to certain groups, neighborhoods, or parts of a community, discriminatory targeting involves directing predatory products or practices to those communities. Discriminatory targeting has also been called “reverse redlining,” often where the targeting is on the basis of geography.
The Consumer Financial Protection Bureau filed a brief in the United States District Court for the Southern District of Florida explaining that the Equal Credit Opportunity’s Act prohibition on discrimination applies “with respect to any aspect of a credit transaction” and so covers every aspect of a borrower’s dealings with a creditor, not just the specific terms of a loan (like the interest rate or fees). Accordingly, discriminatory targeting violates the Equal Credit Opportunity Act where, for example, a creditor targets students on a prohibited basis with unfair or predatory lending practices, such as misrepresenting the cost of an education program when students take out loans to enroll or other predatory conduct relating to the performance of goods and services obtained with credit. The plain text of the law as well as relevant precedent make clear that this conduct violates the Equal Credit Opportunity Act. The brief also explains that, to survive a motion to dismiss under the Equal Credit Opportunity Act, plaintiffs need only plead facts that plausibly allege discrimination, rather than the elements of a prima facie case, which is not a pleading requirement but rather an evidentiary standard.