Conservative legal group targets CFPB rule mandating race, sex data in home loans

A Trump-aligned conservative legal group, America First Legal, has formally petitioned the Consumer Financial Protection Bureau (CFPB) to roll back a rule that requires mortgage lenders to collect and report applicants’ race and sex data. The group argues this mandate is unconstitutional and facilitates discrimination under the banner of diversity, equity and inclusion (DEI), while the CFPB and fair-lending advocates view such data as central to enforcing anti-discrimination laws.​

What the petition targets

• The petition focuses on Regulation C, the CFPB’s rule implementing the Home Mortgage Disclosure Act (HMDA), which requires lenders to collect and report demographic information, including race and sex, for home loan applicants.​

• America First Legal is asking the CFPB to begin a rulemaking process to eliminate these demographic reporting requirements so lenders focus only on creditworthiness metrics like income, debt, and credit history.​

America First Legal’s arguments

• The group claims that forcing applicants to disclose race and sex violates the Constitution and federal civil-rights protections by exposing them to discrimination by both government and private actors.​

• It also contends that the rule encourages lenders to incorporate race and sex into DEI initiatives, allegedly pressuring them to favor certain groups and undermining a “meritocracy and colorblind society” emphasized in President Donald Trump’s April 2025 executive order on credit evaluation.​

CFPB’s rationale for the rule

• The CFPB uses HMDA demographic data to detect and enforce against discriminatory mortgage lending, similar to its separate data-collection rule for small-business credit that tracks whether a business is women- or minority-owned.​

• Academic and policy analyses have argued that collecting race and ethnicity data helps uncover redlining and disparate treatment and can expand access to credit for minority borrowers by making discriminatory patterns visible.​

Political and policy context

• The petition aligns with a broader Trump administration effort to roll back DEI initiatives and to narrow the scope of fair-lending enforcement tools such as disparate impact under the Equal Credit Opportunity Act.​

• At the same time, other stakeholders, including consumer and civil-rights groups, have been pressing in court for robust implementation of CFPB data-collection rules, arguing that delays or cutbacks undermine protections against lending discrimination.​

What could happen next

• The petition is a formal request; the CFPB would need to decide whether to open a rulemaking to amend or repeal Regulation C’s demographic data requirements.​

• If the CFPB refuses or moves slowly, America First Legal and aligned industry or political actors could pursue litigation or additional administrative and legislative strategies to restrict the agency’s authority or the scope of required data collection.​