Document Type
Article
Abstract
Though multiple federal laws explicitly bar discrimination in consumer transactions, many consumer transactions fall in the gaps between those laws. But recently, the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) have attempted to plug those gaps on the theory that discrimination is unfair within the meaning of statutes they enforce prohibiting unfair practices (UDAAP statutes). Angered by this view, the U.S. Chamber of Commerce, joined by various banking trade groups, sued the CFPB in a federal court in Texas and persuaded a conservative judge to invalidate the Bureau’s interpretation. An appeal from the decision is pending.
But, the federal district court was wrong. The CFPB and FTC are correct to treat discrimination as unfair. Dictionary definitions from the era when Congress gave the FTC its unfairness power defined unfairness as showing prejudice and not equal. Congress, including in the statute under which the CFPB acted; administrative agencies; the industry itself, including some of the plaintiffs in the Chamber of Commerce’s case against the CFPB; and conservatives all use the word “fair” to mean non-discriminatory. And discrimination satisfies the criteria Congress established for unfair conduct.
The industry argument to the contrary is based in part on a mistaken view of history—that discrimination had not previously been seen as unfair—and the Major Questions Doctrine, which depends in part on an administrative agency’s claimed discovery of a new power. But, in fact, beginning in the 1960s, multiple administrative agencies found discrimination unfair under UDAAP statutes. Congress had opportunities to reject those interpretations when it amended the FTC Act to clarify when conduct could be unfair and again when it created the CFPB and gave it UDAAP powers, but it did not, suggesting that Congress approved of them. In short, the tools of statutory construction mandate that courts recognize what everyone knows: discrimination is unfair.
Recommended Citation
Jeff Sovern,
Is Discrimination Unfair?,
41
Ga. St. U. L. Rev.
631
(2025).
Available at:
https://readingroom.law.gsu.edu/gsulr/vol41/iss3/10
