Fair Lending

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The Consumer Financial Protection Bureau (CFPB or Bureau) has issued a new proposed rule that would substantially revise 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. The proposal re-centers Section 1071 on “core” providers, products, and data, with a single compliance date and material carve-outs to reduce complexity and improve data quality. The proposal is open for comment for 30 days after publication in the Federal Register. However, just this week the CFPB filed a notice with the D.C. Circuit attaching a Department of Justice (DOJ) Office of Legal Counsel (OLC) opinion which concluded that the Bureau will only be legally funded through December 31, potentially affecting rulemaking and operations timelines.

The Consumer Financial Protection Bureau (CFPB or Bureau) has proposed an unprecedented, far‑reaching rewrite of Regulation B (Reg B) under the Equal Credit Opportunity Act (ECOA). If finalized, the proposed rule would eliminate disparate‑impact liability under ECOA, significantly narrow the scope of “discouragement” to focus on explicit statements directed at applicants or prospective applicants, and prohibit or tightly restrict the use of certain protected‑class criteria in Special Purpose Credit Programs (SPCPs) offered by for‑profit organizations. Existing SPCP‑originated credit would be grandfathered.

Comments are due 30 days after publication in the Federal Register, with a proposed effective date 90 days after publication.

On October 2, the Consumer Financial Protection Bureau (CFPB or Bureau) published a final rule in the Federal Register, officially extending compliance dates for its 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. The final rule replaces an interim rule released in June 2025 that pushed back compliance deadlines. This extension was issued by the CFPB in response to ongoing litigation by both industry and consumer advocacy groups, as well as court orders, to create a uniform timeline for financial institutions to comply with data collection and reporting requirements for women-owned, minority-owned, and small businesses.

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.

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 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.

On July 14, the Office of the Comptroller of the Currency (OCC) issued Bulletin 2025-16, announcing the removal of references to disparate impact liability from the “Fair Lending” booklet of the Comptroller’s Handbook and instructing examiners to cease examining banks for disparate impact liability. This change aligns with Executive Order (EO) 14281, issued by President Trump (discussed here), which aims to eliminate the use of disparate impact liability in all contexts at both the federal and state level.

Today, the Consumer Financial Protection Bureau (CFPB or Bureau) published in the Federal Register an interim final rule extending compliance dates for its 2023 small business lending rule under the Equal Credit Opportunity Act (Regulation B) (Final Rule) This extension comes in response to court orders in ongoing litigation, affecting the timeline for financial institutions to comply with data collection requirements for women-owned, minority-owned, and small businesses.