Fair Lending

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On May 19, President Donald Trump issued Executive Order 14406, “Restoring Integrity to America’s Financial System,” which establishes a new policy to safeguard financial institutions against structural credit risks and deter fraud and abuse. The order links illicit finance, immigration enforcement, and consumer credit risk, and directs federal financial regulators to tighten risk-based controls around non-work authorized populations and their employers. It reflects a policy view that even basic financial services, when offered without robust know-your-customer and due diligence, can facilitate terrorist financing, narcotics and human trafficking, and large-scale money laundering. At the same time, it expresses concern that lending to borrowers who lack work authorization or face a high risk of deportation may undermine safety and soundness because of heightened “ability-to-repay” concerns.

On May 27, the National Fair Housing Alliance (NFHA), Rise Economy (formerly known as the California Reinvestment Coalition), and two fair lending compliance companies (BLDS, LLC, and SolasAI) filed suit in the U.S. District Court for the District of Columbia challenging the Consumer Financial Protection Bureau’s (CFPB or Bureau) Regulation B (Subpart A) final rule, which implements the Equal Credit Opportunity Act (ECOA), and was issued on April 22, 2026. The case, National Fair Housing Alliance et al. v. CFPB et al., is notable not only for challenging the CFPB’s significant rewrite of longstanding Reg B, but also because the NFHA and Rise Economy are the first consumer advocacy organizations to sue the CFPB over the final rule.

Yesterday, President Trump signed an Executive Order titled “Integrating Financial Technology Innovation into Regulatory Frameworks.” The Order directs federal financial regulators to review and streamline regulations, guidance, supervisory practices, and application processes that may impede financial technology (fintech) innovation and competition, and it asks the Federal Reserve to evaluate potential direct access to Reserve Bank accounts and services for uninsured depository institutions and certain non‑bank financial firms, including digital asset companies. The Order is the latest in a series of administration actions aimed at positioning the U.S. as a global leader in digital assets and financial technology.

Yesterday, California Governor Gavin Newsom announced the appointment of Rohit Chopra, former Director of the Consumer Financial Protection Bureau (CFPB) and former Federal Trade Commission (FTC) Commissioner, as Secretary of the state’s new Business and Consumer Services Agency (BCSA). The new cabinet‑level agency, which formally launches on July 1, 2026, is designed to consolidate and elevate state‑level consumer and market oversight at a moment when federal enforcement is being scaled back. Governor Newsom framed the move as bringing “one of the nation’s most prominent consumer protection leaders” into state government to crack down on corporate abuse, curb junk fees, and lower costs for Californians.

On May 5, Craig Trainor, Assistant Secretary for the Office of Fair Housing and Equal Opportunity (FHEO) at the U.S. Department of Housing and Urban Development (HUD), used the American Bankers Association’s Risk and Compliance Conference to send a clear message about how the Trump administration plans to enforce the Fair Housing Act (FHA) going forward, including with respect to how it will treat special purpose credit programs (SPCPs).

Today, the Consumer Financial Protection Bureau (CFPB or Bureau) released its final rule revising the 2023 small business lending data collection and reporting rule under the Equal Credit Opportunity Act (ECOA) and Regulation B, which implements Section 1071 of the Dodd-Frank Act (2026 Final Rule). The 2026 Final Rule will become effective 60 days after publication in the Federal Register, and the compliance date for initial data collection is January 1, 2028.

The U.S. Department of Justice (DOJ) has issued an interim final rule extending the compliance dates for its 2024 Americans with Disabilities Act (ADA) Title II website and mobile application accessibility regulations for state and local governments. This development is noteworthy for anyone watching the long‑running debate over web accessibility standards, as well as the potential implication of this rulemaking for a future DOJ proposed rule governing public accommodations under Title III of the ADA.

In this special joint episode of Payments Pros and The Consumer Finance Podcast, guest host Taylor Gess joins Chris Willis and Lori Sommerfield to unpack fair lending risks in point-of-sale finance. They explain how traditional fair lending concepts under the Equal Credit Opportunity Act and Fair Housing Act play out when merchants interact directly with consumers, highlighting risks around discouraging credit applications, discretionary offers, differential assistance, and steering between prime and subprime products. The conversation explores practical risk mitigation tools, such as standardized sales scripts and consumer disclosures, merchant training, and attorney-directed mystery shopping, along with lessons drawn from unfair or deceptive acts or practices enforcement in point-of-sale settings.

On April 22, the Consumer Financial Protection Bureau (CFPB or Bureau) issued its final rewrite of Subpart A of Regulation B (Reg B) under the Equal Credit Opportunity Act (ECOA), which eliminates disparate impact from enforcement of ECOA, clarifies the prohibition on discouraging prospective applicants, and establishes new restrictions on special purpose credit programs (SPCPs). The Bureau has largely finalized the rule as proposed, with only clarifying edits rather than substantive revisions. Notably, the Bureau did so after receiving approximately 64,500 comments on the proposal from industry, consumer advocates, state attorneys general, and members of Congress. The rule will become effective 90 days after publication in the Federal Register.

On April 17, the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Federal Reserve), and Federal Deposit Insurance Corporation (FDIC) (collectively, the federal agencies) issued revised interagency guidance on model risk management. The guidance updates and consolidates supervisory expectations for how banks manage the growing use of models across their businesses and effectively manage those risks, while rescinding prior guidance issued by each agency. The updated guidance is principles-based and risk-based, rather than prescriptive, and the federal banking agencies emphasize that model risk management should be tailored to a bank’s model risk profile, as well as the size and complexity of its operations. The agencies further state that non-compliance with the guidance itself will not, standing alone, result in supervisory criticism. That said, weak model risk management can still lead to findings of unsafe or unsound practices or violations of law.