The CFPB has issued a proposed rule intended to clarify creditor obligations under Regulation B when it comes to applicant discouragement, disparate impact and special purpose credit programs.
The CFPB notes the Supreme Court has held that some...anti-discrimination statutes may authorize disparate-impact claims. This means “facially neutral policies” can be challenged as being unlawful discrimination if there is a “disproportionate effect” on a prohibited basis. This is referred to as the “effects test”.
The CFPB has proposed that Regulation B be revised to specify that the Equal Credit Opportunity Act does not provide for use of the “effects test” when determining whether discrimination on a prohibited basis has occurred. Currently, §1002.6(a) of Regulation B specifies that ...Congress intended an “effects test” concept.
It will be interesting to see where this goes and, of course, we’ll be watching!
Published
2025/12/15
