NFHA Denounces Proposed CFPB Rule Change Eliminating Fair Access to Lending for Women, Underserved Communities 

FOR IMMEDIATE RELEASE:

NFHA Denounces Proposed CFPB Rule Change Eliminating Fair Access to Lending for Women, Underserved Communities 

WASHINGTON, D.C. – The National Fair Housing Alliance (NFHA) vehemently opposes a newly proposed rule from the Consumer Financial Protection Bureau (CFPB) that would weaken hard-fought fair lending protections for women and limit affordable credit opportunities for underserved communities—namely communities of color and rural residents, especially in the South.

NFHA President and CEO Lisa Rice called the proposed rule change “unconscionable” and said it “must never come into effect.” The proposal would weaken existing protections as housing discrimination remains at near-record levels, as documented in NFHA’s recently-released 2025 Fair Housing Trends Report. Instead of responding to the desires of voters to create more affordability, the Trump administration is once again making it costlier for everyday people to afford and access the American Dream. 

The Notice of Proposed Rulemaking released by the CFPB would eviscerate longstanding fair lending and consumer protections in three dangerous ways: 

• The proposed rule would eliminate the ban that the Equal Credit Opportunity Act (ECOA) has on lending practices that disproportionally harm people based on their immutable characteristics and identity, such as gender, race, color, national origin, age, marital status, religion, or because the applicant receives public assistance. If this change is enacted, this means lenders could freely use credit models that exclude hardworking people in these federally protected classes. This provision reverses the core principle of ECOA which was passed to ensure that women could fairly obtain credit in their own name without their husband or male relative co-signing a loan. 
• The proposed rule would give banks the green light to engage in redlining practices that deny Black, Latino, and other disadvantaged communities fair access to safe and non-predatory mortgages. For example, this rule change would allow banks to only do business in neighborhoods that are predominantly White—avoiding placing bank branches in underserved communities where access to fair credit is impossible to come by.  The people living in these neighborhoods will only be left with the ability to access credit from risky, high-cost lenders peddling loans with exorbitant interest rates and that siphon off hard-earned wealth.
• The proposed rule would stop lenders from establishing Special Purpose Credit Programs (SPCP). These programs are critical to making the American Dream of homeownership accessible to all people. This includes first-generation rural, urban, and suburban residents unable to rely on family members for downpayment assistance because previous generations were wrongfully excluded from federal homeownership programs. In addition to down payment assistance, Special Purpose Credit Programs have expanded access to homeownership by providing interest rate buy-downs and programs tailored to people living in Southern U.S. states, who typically have lower credit profiles than people in the rest of the nation. SPCPs also help financial institutions responsibly lend to more creditworthy borrowers, increasing their ability to expand business opportunities.

The weakening of ECOA, paired with recent actions by the Director of the Federal Housing Finance Agency have undermined the safety of the housing finance system. The FHFA Director recently prohibited the Government Sponsored Enterprises Fannie Mae and Freddie Mac from supporting SPCPs. These programs provided $82 million in reduced costs to 57,282 borrowers of all races from 2022 to 2024. SPCPs also help lenders circumvent systemic barriers that limit credit access for People of Color. An estimated 70 percent of future homebuyers will be Latino and Black. Without access to fair and affordable mortgages, the system will fail.  

“The proposed rule changes are a death knell for lenders. Disparate impact is a business-growth engine and any company that wants to remain viable and competitive will continue to use this critical tool. Disparate impact helps businesses grow and expand their products and services by revealing and removing unnecessary barriers that arbitrarily limit customer reach, suppress innovation, and constrain business opportunities,” said Rice. “These actions ignore mounds of evidence revealing ongoing lending bias, are an assault on decades of settled fair lending law and would promote discrimination in our credit markets. They are a continuation of this administration’s attack on protections against redlining. For these reasons and more, this rule must never be promulgated.”  

The CFPB’s proposed rule change is the Trump administration’s latest effort to dismantle the nation’s capacity to ensure and enforce fair housing as the country deals with a fair and affordable housing crisis.  

The administration has: 

• Fired hundreds of HUD employees—many in the critical Office of Fair Housing and Equal Opportunity during the longest federal government shutdown in U.S. history;
• Implemented measures to eliminate the Consumer Financial Protection Bureau, the only federal agency with an explicit charge from Congress to protect consumers against abuse and discrimination in financial markets;
• Pledged to no longer investigate complaints of discrimination on the basis of sexual orientation and gender identity;
• Blocked congressionally appropriated funds for community-based fair housing organizations fighting against discrimination and ensuring fair access to housing;
• Sought to reverse settled and resolved redlining and discrimination cases to benefit companies and entities charged with violating civil rights laws;
• Implemented measures restricting the ability of HUD’s Office of Fair Housing and Equal Opportunity to fulfill its duties to enforce the Violence Against Women Act;
• Shuttered an inter-agency task force implementing measures to tackle appraisal bias; and
• Announced HUD will no longer use disparate impact to combat illegal housing discrimination, even after the Supreme Court sanctioned the use of this important tool.

“By eliminating the longstanding ‘effects test’ under the ECOA, this rule would also strip away one of the most powerful tools for uncovering and remedying systemic bias in lending,” said Rice. “Disparate impact has been recognized and upheld for more than forty years as essential to enforcing equal lending opportunities and ensuring everyone has access to the credit they deserve. This reckless proposal would embolden discriminatory practices, undermine civil rights enforcement, and roll back generations of progress towards economic justice while threatening the health of the economy.” 

For interviews, please e-mail NFHA Senior Advisor for Communications, Marketing, and Education Julian Glover at JGlover@NationalFairHousing.org 

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The National Fair Housing Alliance (NFHA) 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 and individuals throughout the U.S. and its territories, NFHA works to dismantle longstanding barriers to equity and build diverse, inclusive, well-resourced communities.