On April 22, the CFPB finalized amendments to Regulation B, which implements the ECOA (previously covered by InfoBytes here). The rule, effective July 21, finalizes the three principal changes to Regulation B: (i) eliminating regulatory provisions supporting disparate-impact liability under the ECOA; (ii) narrowing the “discouragement” provision; and (iii) imposing new restrictions on for-profit special purpose credit programs (SPCPs). The CFPB received approximately 64,500 comments, with the Bureau stating that the majority of commenters — including certain consumer advocates, state attorneys general, and members of Congress — opposed the rule, arguing it is inconsistent with the ECOA’s text, purpose, and legislative history and would weaken discrimination protections. Industry commenters and some policy groups supported the rule, stating it aligns with the ECOA’s statutory text and reduces unnecessary regulatory burdens.

The CFPB finalized the rule largely as proposed, concluding that under the “best” reading of the ECOA’s statutory language, disparate-impact claims are not cognizable, the discouragement provision had been interpreted beyond what is necessary to prevent circumvention of the ECOA, and that the SPCP conditions are consistent with the ECOA’s anti-discrimination purpose. The final rule expands official interpretations in the proposed rule for credit scoring systems and clarifies that facially neutral criteria violate the ECOA only to the extent they function as proxies for protected characteristics applied with discriminatory intent.