National Fair Housing Alliance Sues CFPB and Acting Director Vought to Block Dismantling of 50 Years of Fair and Fair and Affordable Credit Protections

FOR IMMEDIATE RELEASE  

Washington, D.C. — Today, the National Fair Housing Alliance® (NFHA™) filed suit in federal court to stop a new Consumer Financial Protection Bureau (CFPB) rule that reverses 50 years of fair lending protections and opens the door to widespread discrimination against women, Black, Latino, Asian, Hawaiian, Pacific Islander, and Native people, people with disabilities, and other underserved communities that have long been denied a fair chance to receive safe and affordable credit. 

The complaint, filed in the U.S. District Court for the District of Columbia, names the CFPB and Acting Director Russell Vought as defendants. NFHA is joined by Rise Economy, BLDS, LLC and SolasAI as co-plaintiffs. The suit challenges a final rule the CFPB issued on April 22, 2026,  that unwinds five decades of fair and affordable credit protections under the landmark Equal Credit Opportunity Act (ECOA). The Bureau advanced the rule despite overwhelming opposition from civil rights organizations, consumer advocates, industry leaders, and the tens of thousands of members of the public who submitted comments during the rulemaking process. 

ECOA, which bars discrimination in lending, was signed into law by President Gerald Ford in 1974 and has been enforced by every administration since—Republican and Democrat alike—until now.  For nearly 50 years, ECOA has barred practices that have unnecessary disparate impact. This vital tool has been used over the decades to ensure millions of qualified borrowers can access safe, affordable credit. ECOA also allows governments, financial services firms, and non-profit entities to create Special Purpose Credit Programs (SPCPs). SPCPs have responsibly opened credit access to underserved communities that generations of discrimination locked out. From 2022-2024, SPCPs backed by Fannie Mae and Freddie Mac (GSEs) helped nearly 58,000 people of all races fairly access homeownership and the ability to build wealth. These numbers exclude SPCP loans that were not sold to the GSEs. The CFPB’s rule upends hard-won progress. 

“This is the deliberate dismantling of 50-years of legal jurisprudence, regulatory guidance, and bipartisan consensus that lending discrimination has no place in America. The statute did not change. The legal decisions did not change. Washington’s commitment did. This reversal by the CFPB is a continuation of this Administration’s efforts to gut fair housing and lending protections. Eviscerating these guardrails will ultimately result in less credit access for many people, make our markets less sound, and cause our economy to be less productive. When the agency built to enforce civil rights and protect consumers walks away from the job, the rule of law remains. That is why we are in court,” said Lisa Rice, President and CEO of the National Fair Housing Alliance. 

The rule does three things, all of them devastating to credit fairness: 

• Purports to eliminate Disparate Impact under ECOA, increasing the risk that lenders will use policies and algorithms that arbitrarily and wrongly exclude protected groups so long as discriminatory intent cannot be proven. This gives lenders the green light to use credit models that unnecessarily exclude creditworthy people, without any requirement to implement fairer alternatives. 

• Narrows the rule against inappropriately discouraging people from applying for loans so severely that regulators will be permitted to ignore digital redlining. The change heightens the possibility that lenders will, for example, market loans to predominately White neighborhoods, leaving Black, Latino, Asian, Hawaiian, Pacific Islander, and Native communities reliant on risky, high-cost lenders that offer predatory loans with exorbitant interest rates. 

• Chills the use of Special Purpose Credit Programs by for-profit institutions. SPCPs purchased by the GSEs have generated $17.2 billion in positive economic impact from 2022 to 2024 alone, assisting persons of all races. The agency offered limited and unconvincing policy justification for the change.  

An analysis conducted by NFHA’s Responsible AI Lab (RAIL), using four Large Language Models to evaluate more than 64,500 public comments submitted on the proposed rule, found overwhelming opposition to these changes. Of the unique comments submitted, 96 percent of comments opposed the removal of disparate impact liability, 96 percent opposed the changes to discouragement protections, and 93 percent opposed the elimination of Special Purpose Credit Programs. The CFPB advanced the rule unchanged despite substantive comments from all sectors opposing the changes. 

“Fairness and equal opportunity in the nation’s credit markets are key to financial wellbeing, family stability, and the success of small businesses. Congress intended that ECOA include disparate impact, a critical legal standard. It was affirmed by federal regulators after passage of the law has been upheld by the courts, and has been applied for decades. This framework has helped lenders ensure that they are serving the full market and has helped them drive profitability. The Administration now reverses that half-century of settled law and progress in a rule-making process marked by unfairness. The CFPB set an unusually short thirty-day public comment period over the Thanksgiving holiday, failed to employ a small business advocacy review panel, and made not a single material change to the rule in response to tens of thousands of comments, the overwhelming majority of which opposed the rule. The Administrative Procedure Act exists to prevent rulemaking like this. The court should set this rule aside,” said Janell Byrd-Chichester, National Fair Housing Alliance General Counsel.  

These rollbacks will have devastating, chilling effects on protections and programs that have worked to prevent discrimination and expand access to fair lending. While the CFPB’s rule focuses on such lending programs created by private financial institutions, it threatens the entire ecosystem of programs like it and denies opportunity for all people to achieve the American dream. 

“This rule undermines one of the nation’s core civil rights protections in lending and will lead to more discrimination in access to credit,” said Skye Perryman, President and CEO of Democracy Forward. “At a time when communities across the country continue to face barriers to homeownership, small business lending, and economic opportunity, the CFPB should be strengthening protections against discrimination, not dismantling them. At Democracy Forward, we are honored to represent a coalition of fair housing and lender advocates in holding the CFPB accountable for abandoning its mission to protect consumers.” 

“The CFPB is upending decades of consistent regulatory implementation of ECOA by dismantling some of the statute’s fundamental protections,” said Allison Zieve, Director of Public Citizen Litigation Group. “The court should reject the CFPB’s arbitrary and unsupported rule, which is inconsistent with the plain text of ECOA.”  

“The CFPB has ignored public comments, common sense, and decades of precedent in its misguided attempt to turn anti-discrimination law on its head. The CFPB was created to protect consumers and small businesses from financial abuse and discrimination, and this final Reg B rule would do real harm, setting us back in our collective efforts to ensure that all families and small businesses have a fair chance to achieve the American Dream,” said Paulina Gonzalez-Brito, CEO of Rise Economy. “The Equal Credit Opportunity Act prohibits lending discrimination and encourages the development of Special Purpose Credit Programs to address the effects of past discrimination. These programs help ensure that underserved borrowers and communities have equitable access to credit while also allowing lenders to reach new markets and customers. The CFPB needs to follow the law and return to its core mission of protecting consumers and small businesses.” 

The lawsuit asks the court to vacate the rule as arbitrary, capricious, contrary to law, in excess of statutory authority, and issued outside the procedures Congress requires. The complaint also challenges CFPB Acting Director Vought’s lawful authority to serve in his role. 

NFHA led a coalition of 78 civil rights organizations in formally opposing the rule during the comment period. The agency advanced its final rule unchanged. 

“This moment calls for organizations to step into the breach when federal institutions abandon their mission, stray from legal precedent, and stop acting in the best interest of the American people. ECOA is the law of the land and has been successful in creating ladders of opportunity for everyone. It must remain intact. NFHA is going to court to ensure it does,” said Rice.  

The case is National Fair Housing Alliance et al. v. CFPB, et al. NFHA, Rise Economy, BLDS, LLC, and SolasAI are represented by Relman Colfax PLLC, Public Citizen Litigation Group, and Democracy Forward. 

Read the complaint here. 

For interviews and inquiries: JGlover@NationalFairHousing.org 

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The National Fair Housing Alliance (NFHA) leads the fair housing movement and is the country’s only national civil rights organization dedicated solely to eliminating all forms of housing and lending discrimination and ensuring equal opportunities for all people. As the trade association for over 170 fair housing and justice-centered organizations throughout the U.S. and its territories, NFHA works to dismantle longstanding barriers to equity and build diverse, inclusive, well-resourced, and resilient communities.