In light of its April final rule amending key fair lending requirements, the Consumer Financial Protection Bureau (CFPB) rescinded a 2020 advisory opinion on Regulation B, an implementing rule for the Equal Credit Opportunity Act.
The CFPB published in the Federal Register on June 17 addressing certain aspects of for-profit special purpose credit programs (SPCPs) asserted the advisory opinion “contains statements that conflict with these recent amendments to Regulation B” and its withdrawal is intended to “avoid any confusion about the appropriate standards and related conditions for SPCPs offered or participated in by for-profit organizations.”
“As one example, the advisory opinion states that all program participants in an SPCP offered or participated in by a for-profit organization may be required ‘to share one or more common characteristics (for example, race, national origin, or sex )’; the April 2026 final rule, however, prohibits any SPCP offered or participated in by a for-profit organization from using the common characteristic of race, color, national origin, or sex, or any combination thereof, as a factor in determining eligibility for the program,” the CFPB wrote. “In addition, the advisory opinion addresses SPCP provisions under Regulation B that have since been amended, rendering those discussions out-of-date or, at best, incomplete.”
The 2020 advisory opinion sought to address regulatory uncertainty regarding the applicability of Regulation B to certain aspects of SPCPs designed and implemented by for-profit organizations.
Specifically, the advisory was intended to clarify the content for-profit organizations were required to include in a written plan establishing and administering an SPCP under Regulation B. It also sought to clarify permissible types of research and data for informing a for-profit organization’s determination an SPCP necessity for the benefit of certain underserved populations.
The CFPB’s final rule amending Regulation B was met with support from financial services organizations but pushback from consumer advocacy groups, particularly those concerned about its removal of references to “disparate impact” theory.