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By now, you have likely heard of the HUD complaint that was filed against Facebook for ad buying practices that allow the use of filters which are discriminatory in nature.  Since that initial complaint, the National Fair Housing Alliance and other interested parties have filed a complaint in the United States Southern District Court of New York.  Not to be missed, the Department of Justice filed a statement of interest regarding this case.  A statement of interest is generally filed when lower courts are addressing an issue that may have an impact on Federal laws, which of course, the Fair Housing Act is.

My take on this issue will be a two-part series because of the importance of what we are watching here.

Part one will break down the background and concerns.

Part two, I will do what I always do and provide some practical and actionable solutions to protect your business!

This battle should not be underestimated.  The outcome of this will be used as an example for future cases for years to come, and none of us want to be part of that example.  If Facebook challenges and wins, then lenders will likely modify their practices and thank Facebook for taking the first hit.  If Facebook loses, then Board Rooms at just about every lender will be filled with executives trying to modify practices or commiserate over legacy ad purchases.

For mortgage lenders, this could be one of the most significant challenges you have to face if your sales or marketing people have purchased ads on Facebook, and here is why.

Marketing and Sales have a very different mindset regarding targeted marketing.  In their world, it makes perfect sense to add all the filters that you can to direct your message to those who are most likely to buy the product or use the service.  Seems pretty logical, right?  Well, it would be if you were not in housing and financial services which do not allow ads to be targeted on a prohibited basis.  What they often fail to consider is that there is Federal and State regulation that find it discriminatory when you apply certain types of filters, and this is what gets lenders into trouble.

I can now hear the roar of some sales and marketing people calling “BS” on this right now and stating how stupid all of this is.  After all, how can they market to everyone and call that a sensible use of money and time? Trust me folks, there are ways to target market without discriminatory filters and still get great results! I instruct companies about how to do this and I did it as a top producing mortgage originator at one time, and you can too!

“Experts” who told companies that they needed to diversify into “this” market or “that” market advised them to use prohibited filters to “capture” that market.  What they failed to do was consider the consequences of the Federal Regulation that must be adhered to for marketing financial products and services and housing.

In addition to that, you have some very uninformed people espousing on the Internet that since the CFPB is “under new management and will be gone” (seriously, you believe that?) that no one can bring a claim against you and your company.  So let’s clear up that misnomer first.

HUD oversees The Fair Housing Act and the CFPB oversees the ECOA (Equal Credit Opportunity Act). The Fair Housing Act has been enforced since 1968 as part of the Civil Rights Act and ECOA since 1974. Just because the CFPB and HUD oversee these laws, DOES NOT mean that other prudential, federal or state regulators cannot file complaints against you or your company for violation of these federal laws. Consumer advocacy groups can file complaints against you as well.

What compounds this issue for many lenders is that social media marketing is relatively new, as is regulatory oversight for a large portion of the mortgage lending market.

Following is an excerpt from the complaint which I have linked below for your reference.

“Facebook unlawfully discriminates by enabling advertisers to restrict which Facebook users receive housing-related ads based on race, color, religion, sex, familial status, national origin and disability. Facebook mines extensive user data and classifies its users based on protected characteristics. Facebook’s ad targeting tools then invite advertisers to express unlawful preferences by suggesting discriminatory options, and Facebook effectuates the delivery of housing-related ads to certain users and not others based on those users’ actual or imputed protected traits.

As of July 24, 2018, Facebook’s ad targeting tools enable advertisers of housing and housing-related services to discriminate in the following non-exhaustive list of ways:

  • Facebook enables advertisers to discriminate based on sex by showing ads only to men or only to women.
  • Facebook enables advertisers to discriminate based on disability by not showing ads to users whom Facebook categorizes as interested in “assistance dog,” “mobility scooter,” “accessibility” or “deaf culture.”
  • Facebook enables advertisers to discriminate based on familial status by not showing ads to users whom Facebook categorizes as interested in “child care” or “parenting,” or by showing ads only to users with children above a specified age.
  • Facebook enables advertisers to discriminate based on religion by showing ads only to users whom Facebook categorizes as interested in the “Christian Church,” “Jesus,” “Christ” or the   “Bible.”
  • Facebook enables advertisers to discriminate based on national origin by not showing ads to users whom Facebook categorizes as interested in “Latin America,” “Southeast Asia,” “China,” “Honduras,” “Somalia,” the “Hispanic National Bar Association” or “Mundo Hispanico.”
  • Facebook enables advertisers to discriminate based on race and color by drawing a red line around majority-minority zip codes and not showing ads to users who live in those zip codes.”

Now what I find very interesting is that since this complaint was filed, the ad company used at Facebook makes a statement about not discriminating, but on the front page they still have Sex and Age {ECOA} as a predominant filter!

Facebook, you clearly need the services I offer at Fair Lending Diversity!  I can be reached at

In part two of this series, I will identify the filters you should avoid and give you some tips from top compliance folks on how to manage your ad purchases to prevent future issues.  Stay Tuned!

Click Here to Access the HUD Complaint 


Tammy Butler, Master CMB

Author Tammy Butler, Master CMB

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