Overview
- The Bureau’s draft would revise Regulation B to declare that the Equal Credit Opportunity Act does not authorize disparate-impact liability, shifting enforcement toward intentional discrimination.
- Acting Director Russell Vought signed the proposal, which narrows the rule against discouraging applicants by focusing on directed statements and shielding targeted advertising from liability.
- For-profit lenders’ Special Purpose Credit Programs would face new restrictions, including a ban on using race, color, national origin, or sex as eligibility criteria, with existing SPCP-originated credit grandfathered.
- The initiative follows President Donald Trump’s April executive order urging regulators to curtail effects-based rules and echoes prior rollbacks that encountered litigation.
- Consumer advocates and Democrats condemned the plan, and the CFPB acknowledged potential harms for elderly, minority, and low-income borrowers if effects-based remedies are removed.