On December 16, the Federal Reserve (Fed) hosted its annual Fair Lending Interagency Webinar, during which it, the National Credit Union Administration (NCUA) and the Consumer Financial Protection Bureau (CFPB) offered insight into their fair lending programs.
The Fed highlighted its risk-focused approach to fair lending supervision, emphasizing the importance of tailored risk assessments, recurring training and robust monitoring of discretionary lending practices. Examiners continue to focus on identifying and addressing redlining, pricing disparities and weaknesses in compliance management systems. The NCUA described its fair lending program, which centers on comprehensive compliance management systems, regular risk assessments and board training for credit unions. Notably, the NCUA has aligned with other regulators in moving away from disparate impact analyses in its examinations, focusing instead on overt and comparative evidence of discrimination.
Shift in CFPB fair lending priorities
The CFPB reported that its fair lending agenda is undergoing a significant shift, with several notable updates that track a recent notice of proposed rulemaking (NPRM) to amend provisions of Regulation B.
- Disparate impact: In a significant departure from its prior stance, the CFPB is no longer using disparate impact theory in its supervision or enforcement of fair lending laws. This change reflects the CFPB’s recent proposal to remove current Regulation B language that supports disparate impact liability under the Equal Credit Opportunity Act (ECOA).
- Special purpose credit programs (SPCPs): The CFPB is no longer meeting with creditors to discuss SPCPs, indicating a step back from active engagement in this area and tracking the recent NPRM, which would impose new restrictions to “more closely align [SPCPs] with [their] statutory purpose.”
The CFPB also highlighted that “debanking” – generally referred to as the practice of denying financial services or closing existing bank accounts of a customer deemed risky to the financial institution – has become one of its main priorities. The CFPB has dedicated resources across the agency to implementing the president’s executive order on debanking, including the formation of a Debanking Task Force.
Enforcement and supervision priorities
The CFPB shared that its fair lending enforcement and supervision will concentrate on:
- ECOA compliance: Examinations will focus on direct evidence of intentional discrimination on a prohibited basis, systemic failures to provide applicants with legally required adverse action notices and lenders’ systems for identifying risks of noncompliance with the ECOA and Regulation B.
- Home Mortgage Disclosure Act (HMDA) compliance: Examiners will prioritize validating the accuracy of key data points collected and submitted by lenders under the HMDA.
The CFPB is also prioritizing cases with actual, identifiable victims and intentional racial discrimination, and said it will seek maximum penalties and direct redress for those affected. Special attention will also be given to protecting service members, their families and veterans.
Rulemaking and guidance
The CFPB reiterated that it finalized a rule to extend compliance deadlines for the Section 1071 Small Business Lending Rule by approximately one year and proposed revisions to Regulation B to implement changes made by Section 1071. It also noted that in May 2025, it rescinded more than 60 guidance materials and now aims to issue guidance only when necessary and when it reduces compliance burdens.
Takeaways for financial institutions
As the fair lending landscape continues to evolve, institutions should review their compliance programs and risk assessments to ensure alignment with the priorities shared by the CFPB. We expect to see greater scrutiny of ECOA and HMDA compliance, with a focus on intentional discrimination and adverse action notice failures, continued investigations into debanking practices, and reduced engagement with respect to SPCPs.