CFPB Provides ABA-Advocated ECOA Guidance

The Consumer Financial Protection Bureau today issued guidance on Regulation B—which implements the Equal Credit Opportunity Act—as it applies to special purpose credit programs, a move advocated by ABA.

The CFPB said it is not considered discrimination for for-profit organizations to provide special purpose credit programs designed to meet special social needs, adding that the bureau, “does not determine whether individual programs qualify for special purpose credit status. Instead, the creditor offering the SPCP must determine the status of its program.”

The guidance also clarifies what a for-profit organization must include in a written plan that establishes and administers a SPCP under Regulation B and clarifies the type of research and data that may be appropriate to inform a for-profit organization’s determination that a SPCP would benefit a certain class of people.

In a recent comment letter to the bureau on its request for information on Regulation B and the ECOA, ABA emphasized the need for flexibility “rather than rigid rules” and urged the bureau to provide guidance that would encourage innovation and facilitate broader access to credit, including guidance on use of special purpose credit programs. The CFPB said it hoped with the release of the guidance that more creditors will offer SPCPs and increase access to credit to underserved groups.