Federal housing and banking regulators are rescinding 2022 guidance on special-purpose credit programs, or SPCPs, saying the document conflicts with fair lending law.
The 2022 interagency guidance sought to assure lenders that SPCPs established to meet the needs of certain populations were legal under the Equal Credit Opportunity Act, or ECOA, which prohibits creditors from discriminating against applicants on the basis of race, sex and other factors. The Trump administration instead argues that federal law explicitly prohibits those considerations.
“These prior interpretations cannot be reconciled with the statutory text of ECOA and the [Federal Housing Act], which expressly prohibit discrimination against individuals based on prohibited characteristics,” the agencies said in a notice in the Federal Register. “Furthermore, the Supreme Court has been consistent that race-based policies are subject to higher scrutiny and that a general desire to remedy societal discrimination does not satisfy such threshold.”
The agencies rescinding the 2022 guidance are the FDIC, Office of the Comptroller of the Currency, National Credit Union Administration, Consumer Financial Protection Bureau, Department of Housing and Urban Development, Department of Justice and Federal Housing Finance Agency. In addition, the CFPB and FHFA previously suspended and reversed their own guidance and policies on SPCPs
