Recently, the U.S. Department of Housing and Urban Development (HUD) issued two memoranda that clarify HUD’s role in enforcing the Fair Housing Act (FHA), explain how future enforcement efforts will proceed, and officially rescind several guidance documents related to disparate impact and redlining, among other topics.
On August 29, the Federal Deposit Insurance Corporation (FDIC) announced updates to its Consumer Compliance Examination Manual, marking a pivotal shift in how potential discrimination under the Equal Credit Opportunity Act and Fair Housing Act will be evaluated. The FDIC will now focus solely on evidence of disparate treatment, removing all references to disparate impact analysis from its examination procedures. This action follows on the heels of the OCC’s announcement on July 14 that it had removed all references to disparate impact analysis from the Fair Lending booklet of the Comptroller’s Handbook and directed examiners to cease examining banks for disparate impact liability, discussed here.
On August 26, the U.S. Small Business Administration (SBA) took action to enforce President Trump’s directive by issuing a letter to its network of over 5,000 lenders. This letter mandates the cessation of alleged politicized or unlawful banking practices, requiring lenders to reinstate qualified customers who were wrongfully denied access to financial services based on political, religious, or ideological beliefs. It further warns that punitive measures will be taken against lenders who fail to comply with the directives. This move marks a significant step in implementing Executive Order 14331, Guaranteeing Fair Banking for All Americans.
The Consumer Financial Protection Bureau (CFPB or Bureau) is taking a significant step to modify its supervisory approach to nonbanks by publishing a proposed rule advancing a more stringent definition of “risks to consumers” in the context of § 1024(a)(1)(C) of the Consumer Financial Protection Act (CFPA) when designating nonbanks for supervision. This move aims to limit the Bureau’s oversight of nonbanks to cases where there is a high likelihood of significant harm to consumers, thereby narrowing the scope of its supervisory authority.
In this episode of The Consumer Finance Podcast, Chris Willis, Heryka Knoespel, and Lori Sommerfield discuss overdraft and deposit account fees as they continue to dive into the CFPB’s guidance withdrawal. They highlight the regulatory and litigation impacts of the rescinded guidance and its impact on banks and financial institutions, particularly in terms of compliance burdens and fee income, while also weighing potential reputational risks and operational challenges that may arise if policy changes follow the CFPB’s withdrawn guidance. This episode also emphasizes the importance of financial institutions being prepared to defend against lawsuits, specifically those related to Regulation E and affirmative consent.
On August 21, the Consumer Financial Protection Bureau (CFPB or Bureau) took a significant step forward in its reconsideration of the Section 1033 open banking final rule, originally issued in November 2024, by issuing an Advance Notice of Proposed Rulemaking (ANPR). This move follows the Bureau’s announcement that it would be reopening the rulemaking process when it requested a stay to the original rule amidst legal challenges.
As has been well-documented, the Consumer Financial Protection Bureau (CFPB or Bureau) is navigating a period of significant uncertainty. Just last week, the U.S. Court of Appeals for the District of Columbia vacated a preliminary injunction in the case of National Treasury Employees Union v. CFPB, potentially allowing for substantial layoffs and operational changes within the agency (discussed here). Despite this development, the CFPB briefly released an ambitious rulemaking agenda on the OMB’s Office of Information and Regulatory Affairs website on August 15, which then became inaccessible due to “Site Maintenance.”
On August 15, the U.S. Court of Appeals for the District of Columbia issued a decision in the case of National Treasury Employees Union (NTEU) v. Consumer Financial Protection Bureau (CFPB or Bureau). The appellate court vacated the district court’s preliminary injunction, which had previously restricted the CFPB’s actions to halt the Bureau’s operations and terminate its employees.
In a significant turn of events, the Consumer Financial Protection Bureau (CFPB or Bureau) has decided to initiate a new rulemaking process concerning its final rule on personal financial data rights under Section 1033 of the Consumer Financial Protection Act of 2010 (1033 rule). This decision comes amidst ongoing legal challenges, notably from Forcht Bank, N.A.; Kentucky Bankers Association; and the Bank Policy Institute, which filed a lawsuit immediately after the 1033 rule was finalized challenging it.
On July 10, the U.S. Department of Housing and Urban Development (HUD) and the Office of Management and Budget (OMB) jointly announced the effective disbandment of the interagency Property Appraisal and Valuation Equity (PAVE) Task Force, a Biden-era initiative aimed at addressing discrimination in real estate appraisals through a whole of federal government approach. The announcement states that this decision to eliminate “the core policies of the PAVE Task Force” is in response to President Trump’s Executive Orders, including Ending Radical and Wasteful Government DEI Programs and Preferencing and Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis.