On February 3, several U.S. senators sent a letter to CFPB Acting Director Russell Vought urging the Bureau to rescind its proposed rule that would end the ECOA’s disparate impact test, which would prevent the CFPB from taking action against creditors that maintain lending policies that “have an unfair impact on historically discriminated-against groups.” The senators argued that contrary to claims made by Vought in a recent op-ed, the proposed rule would “open the floodgates for discrimination in all consumer lending, including mortgages, credit cards, and car loans.”
The senators noted that the disparate impact analysis is a critical enforcement tool for civil rights and the ECOA, and that Congress “made clear that focusing only on intentional, explicit discrimination was not sufficient to address inequity in the credit market.” They also stated that the proposed rule would overturn “decades of legal precedent” to advance what the senators characterized as the current administration’s “unsubstantiated ideological crusade to dismantle disparate impact protections across the federal government.” The lawmakers also emphasized their concern that the proposed rule would result in lenders not providing Special Purpose Credit Programs, which Congress authorized “to provide affordable credit to historically discriminated-against groups, in order to help build wealth and close wealth gaps.” The senators requested a briefing on the CFPB’s efforts to rescind the rule by February 10.
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