Equal Credit Opportunity Act (Regulation B)

CONSUMER FINANCIAL PROTECTION BUREAU <CFR>12 CFR Part 1002</CFR> <DEPDOC>[Docket No. CFPB-2025-0039]</DEPDOC> <RIN>RIN 3170-AB54</RIN> <SUBJECT>Equal Credit Opportunity Act (Regulation B)</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Consumer Financial Protection Bureau. <HD SOURCE="HED">ACTION:</HD> Proposed rule; request for public comment. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Consumer Financial Protection Bureau (Bureau or CFPB) is issuing a proposed rule for public comment that amends provisions related to disparate impact, discouragement of applicants or prospective applicants, and special purpose credit programs under Regulation B, the regulation implementing the Equal Credit Opportunity Act (ECOA or Act). The amendments would facilitate compliance with ECOA by clarifying the obligations imposed by the statute. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be received on or before December 15, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> You may submit comments, identified by Docket No. CFPB-2025-0039 or RIN 3170-AB54, by any of the following methods: • <E T="03">Federal eRulemaking Portal: https://www.regulations.gov.</E> Follow the instructions for submitting comments. A brief summary of this document will be available at <E T="03">https://www.regulations.gov/docket/CFPB-2025-0039.</E> • <E T="03">Email: 2025-NPRM-ECOA@cfpb.gov.</E> Include Docket No. CFPB-2025-0039 or RIN 3170-AB54 in the subject line of the message. • <E T="03">Mail/Hand Delivery/Courier:</E> Comment Intake—2025 NPRM ECOA, c/o Legal Division Docket Manager, Consumer Financial Protection Bureau, 1700 G Street NW, Washington, DC 20552. <E T="03">Instructions:</E> The CFPB encourages the early submission of comments. All submissions should include the agency name and docket number or Regulatory Information Number (RIN) for this rulemaking. Because paper mail is subject to delay, commenters are encouraged to submit comments electronically. In general, all comments received will be posted without change to <E T="03">https://www.regulations.gov.</E> All submissions, including attachments and other supporting materials, will become part of the public record and subject to public disclosure. Proprietary information or sensitive personal information, such as account numbers or Social Security numbers, or names of other individuals, should not be included. Submissions will not be edited to remove any identifying or contact information. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Dave Gettler, Paralegal Specialist, Office of Regulations, at 202-435-7700 or <E T="03">https://reginquiries.consumerfinance.gov/.</E> If you require this document in an alternative electronic format, please contact <E T="03">CFPB_Accessibility@cfpb.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Summary</HD> Pursuant to its authority under ECOA, 15 U.S.C. 1691b(a), and the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), 12 U.S.C. 5512(b), the Bureau is proposing to amend provisions in Regulation B, 12 CFR part 1002, pertaining to: whether disparate impact is cognizable under the Act; under what circumstances a creditor may be deemed to be discouraging an applicant or prospective applicant; and under what conditions may a creditor offer special purpose credit programs. In 2020, the Bureau issued a Request for Information on ECOA and Regulation B (RFI). <SU>1</SU> <FTREF/> The RFI solicited information about disparate impact, prospective applicants, and special purpose credit programs, among other topics. The Bureau reviewed the comments submitted in response to the RFI and obtained other information in the course of carrying out its statutory responsibilities. <FTNT> <SU>1</SU>  85 FR 46600 (Aug. 3, 2020). </FTNT> In order to carry out the purposes of ECOA, the Bureau proposes changes to Regulation B to provide that ECOA does not authorize disparate-impact liability (effects test), further define discouragement, and add prohibitions and restrictions for special purpose credit programs. <HD SOURCE="HD1">II. Background</HD> <HD SOURCE="HD2">A. Introduction</HD> Congress enacted ECOA in 1974 (1974 Act) “to insure that various financial institutions and other firms engaged in the extensions of credit exercise their responsibility to make credit available with fairness, impartiality, and without discrimination on the basis of sex or marital status.” To that end, section 701(a) of ECOA made it “unlawful for any creditor to discriminate against any applicant on the basis of sex or marital status with respect to any aspect of a credit transaction.” The Board of Governors of the Federal Reserve System (Board) promulgated regulations implementing ECOA. In 1976, Congress reenacted ECOA in its entirety, amending ECOA to add additional categories of prohibited discrimination (1976 Act). Since 1976, ECOA makes it unlawful for “any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction (1) on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract); (2) because all or part of the applicant's income derives from any public assistance program; or (3) because the applicant has in good faith exercised any right under [the Consumer Credit Protection Act]” (prohibited basis). <SU>2</SU> <FTREF/> The Board, which at the time had exclusive rulemaking authority under ECOA, promulgated regulations, after notice-and-comment, to implement the 1976 Act. <FTNT> <SU>2</SU>  15 U.S.C. 1691(a). </FTNT> In 2011, the Dodd-Frank Act transferred responsibility for ECOA from the Board to the Bureau. <SU>3</SU> <FTREF/> It granted primary authority to the Bureau to supervise and enforce compliance with ECOA and Regulation B for entities within the Bureau's jurisdiction and to issue regulations and guidance to implement and interpret ECOA. <SU>4</SU> <FTREF/> The Bureau's Regulation B substantially duplicates the Board's Regulation B making only certain non-substantive, technical, formatting, and stylistic changes. <SU>5</SU> <FTREF/> <FTNT> <SU>3</SU>  Public Law 111-203, 124 Stat. 1376 (2010). </FTNT> <FTNT> <SU>4</SU>  Dodd-Frank Act section 1029 generally excludes from this transfer of authority, subject to certain exceptions, any rulemaking authority over a motor vehicle dealer that is predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both. </FTNT> <FTNT> <SU>5</SU>  76 FR 79442 (Dec. 21, 2011). </FTNT> In 2020, the Bureau published an RFI seeking comments and information to identify opportunities to prevent credit discrimination, encourage responsible innovation, promote fair, equitable, and nondiscriminatory access to credit, address potential regulatory uncertainty, and develop viable solutions to regulatory compliance challenges under ECOA and Regulation B. <SU>6</SU> <FTREF/> The RFI requested information related to disparate impact, prospective applicants, and special purpose credit programs (SPCPs), among other issues. In response to the RFI, the Bureau received and reviewed over 35 comment letters. In addition, the Bureau has obtained pertinent information in the course of carrying out its supervisory and enforcement responsibilities. <FTNT> <SU>6</SU>  85 FR 46600 (Aug. 3, 2020). </FTNT> In 2025, the President issued several Executive Orders relevant to the Bureau's administration of ECOA. Executive Order 14173, entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” states in part that “[t]he Federal Government is charged with enforcing our civil-rights laws. The purpose of this order is to ensure that it does so by ending illegal preferences and discrimination.”  <SU>7</SU> <FTREF/> Executive Order 14281, entitled “Restoring Equality of Opportunity and Meritocracy,” states in part that “[i]t is the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible to avoid violating the Constitution, Federal civil rights laws, and basic American ideals.”  <SU>8</SU> <FTREF/> <FTNT> <SU>7</SU>  90 FR 8633 (Jan. 31, 2025). </FTNT> <FTNT> <SU>8</SU>  90 FR 17537 (Apr. 28, 2025). </FTNT> Consistent with these actions, the Bureau proposes this rule to (i) provide that ECOA does not authorize disparate impact claims; (ii) amend the prohibition on discouraging applicants or prospective applicants to clarify that it prohibits statements of intent to discriminate in violation of ECOA and is not triggered merely by negative consumer impressions, and to clarify that encouraging statements by creditors directed at one group of consumers is not prohibited discouragement as to applicants or prospective applicants who were not the intended recipients of the statements; and (iii) amend the standards for SPCPs offered or participated in by for-profit organizations to include new standards and related restrictions. The proposed rule is discussed further below. The Bureau seeks comments on the entire proposal. <HD SOURCE="HD2">B. Disparate Impact</HD> In <E T="03">Griggs</E> v. <E T="03">Duke Power Co.</E> <SU>9</SU> <FTREF/> and subsequent cases, the Supreme Court held that certain provisions in antidiscrimination statutes may authorize disparate-impact claims. Under a disparate-impact claim, a plaintiff may challenge as unlawful discrimination facially neutral policies that have a disproportionate effect along prohibited basis lines. The Supreme Court has noted that “[i]n contrast to a disparate-treatment case, . . . a plaintiff bringing a disparate-impact claim challenges practices that have a dispropo ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 176k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━