News & Impact Stories

CFPB Guts Fair Lending   

April 21, 2026 — Press Release

Bad Process Leads to Bad Rule As CFPB Fails to Meaningfully Review More than 64,500 Comments  

WASHINGTON – Today, the Consumer Financial Protection Bureau (CFPB) took a major step backward, issuing a rule that eviscerates fair lending protections under the Equal Credit Opportunity Act (ECOA). 

In a rushed process that failed to give sufficient time for public comment – or to meaningfully review the 64,500+ comments submitted – the CFPB dealt a devastating blow to the many people who face discrimination when they seek credit to buy a car or house or to start a small business. Black people, Latinos, Native Americans, servicemembers and veterans, and older adults may all find it particularly harder and more expensive to get loans. 

“The CFPB has replaced public engagement with rulemaking by fiat,” said Diane Thompson, deputy director and chief advocacy officer at the National Consumer Law Center. “Good rulemaking is done in the open. This sham process resulted in a flawed, dangerous rule that exposes people to rampant credit discrimination in the midst of an affordability crisis.” 

The ECOA is a landmark law passed by Congress in 1974 to remedy systemic discrimination in access to credit. The ECOA was specifically directed at changing the widespread refusal of banks to lend money to women without a male co-signer, usually a husband or father. The law prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, the receipt of public assistance benefits, and exercising rights under the federal Consumer Protection Act.

The ECOA’s protections against credit discrimination targeting consumers who have exercised their rights under the Consumer Credit Protection Act, including holding debt collectors accountable for harassing debt collection, illegal wage garnishment, and improper credit reporting, are especially important in the current economic situation. With debt collection numbers rising, and overall consumer debt increasing, relaxing protections for people from illegal and harassing conduct in debt collection is dangerous. 

“This rule does nothing to address historic or current systemic discrimination in access to credit,” said Odette Williamson, director of Racial Justice Advocacy at the National Consumer Law Center. “It sets the stage for hidden discrimination and predatory lending, including old threats, like redlining, and new problems, such as algorithmically based discrimination.” 

The new rule will make it easier for lenders to deny credit based on a number of factors, including whether a person has exercised their right to seek information about their loan or challenged a bank’s handing of a loan. Borrowers will have less visibility and control over what they pay for credit for car loans, mortgages, student loans, and credit cards.

The CFPB claims the new rule will reduce the compliance burden and litigation risks for lenders; however, it won’t even achieve that. “Lenders are still subject to lawsuits by state attorneys general and private individuals under the ECOA,” Thompson said. “And while the CFPB is abandoning its role as interpreter and enforcer of the law, lenders will remain subject to litigation in every courtroom in the country.”

The new rule follows a CFPB statement allowing creditors to discriminate against people applying for credit based on a borrower’s immigration or citizenship status. “By withdrawing important protections for immigrants who may already be struggling for access to fair credit, the CFPB is taking yet another discriminatory action to yank access to capital away from hardworking people trying to buy homes and start small businesses,” Williamson said. 

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