Mortgage Trade Groups Back CFPB Plan To Revise ECOA

Mortgage and banking trade groups are broadly supporting the CFPB’s proposed revisions to ECOA/Regulation B, while consumer and civil rights groups are warning that the plan would significantly weaken fair‑lending protections.​

What the CFPB is proposing

The CFPB’s November 2025 Notice of Proposed Rulemaking would overhaul key parts of Regulation B, including disparate impact, “discouragement” standards, and rules for Special Purpose Credit Programs (SPCPs). The proposal would clarify that ECOA does not authorize disparate‑impact liability, narrow discouragement to explicit discriminatory statements to applicants or prospective applicants, and sharply restrict the use of protected‑class characteristics (such as race or sex) in SPCPs offered by for‑profit creditors.​

Why mortgage trade groups back it

Mortgage and broader banking trade groups argue the proposal brings ECOA back to its statutory text and reduces legal uncertainty around disparate‑impact theories. Groups such as the American Bankers Association say a clearer, “durable” framework will support nondiscriminatory lending while minimizing ambiguity, which they claim currently chills innovation and prudent, risk‑based underwriting.​

Why consumer groups push back

Consumer, civil rights, and legal aid organizations contend the rule would “gut” fair‑lending protections by eliminating disparate‑impact liability and hollowing out discouragement provisions. They argue this would make it harder to challenge policies that disproportionately harm protected groups and would undermine Congress’s goals in ECOA, including the use of SPCPs to expand credit access for marginalized communities.​

What it could mean for mortgage lending

If finalized as proposed, lenders would likely shift compliance programs away from ECOA disparate‑impact testing and focus more on intentional discrimination and proxy discrimination, while still considering Fair Housing Act and state disparate‑impact rules. For mortgage borrowers and communities, critics warn the changes could allow facially neutral policies with discriminatory effects to persist, while supporters expect more regulatory clarity and potentially more flexibility in marketing, pricing, and underwriting strategies.​