The Consumer Financial Protection Bureau is asking a federal court to dismiss a lawsuit brought by consumer groups and vendors to prevent the agency from removing disparate impact as a prohibited practice from Regulation B, which implements the Equal Credit Opportunity Act.
President Trump last year issued executive orders directing federal agencies to “deprioritize enforcement” of statutes and regulations that include disparate-impact liability. The CFPB in April finalized changes to Regulation B to conform to the order, including narrowing the prohibition on “discouragement” and restricting special-purpose credit programs designed to increase access to credit based on race and other characteristics.
In a lawsuit filed in U.S. District Court for D.C., the two consumer groups and two fair lending compliance firms alleged the CFPB ignored decades of law and “its own research showing discrimination in lending is still a critical problem.” The CFPB disputed those claims in a court filing this week, accusing the plaintiffs of “nitpicking various procedural aspects of the bureau’s rulemaking” instead of challenging the changes made to Regulation B.
The bureau also defended its authority to set standards for special purpose credit programs, which “risk undermining the ECOA’s purposes by authorizing the very forms of discrimination that the ECOA is designed to prohibit.”
The CFPB asked the court to dismiss the plaintiffs’ request for summary judgment and instead grant summary judgment in favor of the bureau.
