After the proposal was revealed, Nikitra Bailey, govt vice chairman on the Nationwide Honest Housing Alliance (NFHA) testified earlier than Congress about her causes for opposing the change and has now launched a video on YouTube that outlines her considerations.
“ECOA turned the regulation in 1974 and it stops banks from denying you a mortgage or a bank card due to who you might be and issues that you simply can not management, like your race, your gender, your pores and skin shade, your faith, your age and whether or not or not you’re married,” Bailey says within the video. “This can be a regulation that gave us ladies the flexibility to enter a financial institution and get a good mortgage for a house with out having a male co-signer signal on our behalf.”
Mortgage trade veteran Religion Schwartz, founder and CEO of Housing Finance Methods, shared Bailey’s video on LinkedIn and urged mortgage leaders to offer suggestions to the CFPB earlier than the remark interval ends on Dec. 15. It has now been reshared by others and the comments counsel the problem had flown underneath the wire for a lot of within the trade, who expressed shock on the proposal.
What’s within the proposal?
Along with eradicating the CFPB’s recognition of disparate influence claims, the proposal would additionally tighten the definition of what counts as discouraging candidates — decreasing the conditions wherein lenders could possibly be held answerable for actions or statements that may deter individuals from making use of for credit score.
Moreover, the rule would revise the requirements for SPCPs, which permit lenders to supply focused loans to underserved teams with out violating the regulation.
The proposal mentioned that the modifications are supposed to make clear lenders’ obligations and make it simpler to adjust to the regulation. Critics, together with honest lending advocates, warned that the proposal might cut back entry to credit score for ladies, communities of shade and rural residents.
NFHA launched a public statement when the proposal was introduced saying it “vehemently opposes” the modifications. NFHA President and CEO Lisa Rice referred to as the proposed rule change “unconscionable” and mentioned it “must not ever come into impact.”
Rice continued: “The proposed rule modifications are a demise knell for lenders. Disparate influence is a business-growth engine and any firm that wishes to stay viable and aggressive will proceed to make use of this crucial device… These actions ignore mounds of proof revealing ongoing lending bias, are an assault on a long time of settled honest lending regulation and would promote discrimination in our credit score markets. They’re a continuation of this administration’s assault on protections towards redlining. For these causes and extra, this rule must not ever be promulgated.”
Rice added that by eliminating the longstanding “results check” underneath the ECOA, this rule would “strip away one of the crucial highly effective instruments for uncovering and remedying systemic bias in lending.”
“This reckless proposal would embolden discriminatory practices, undermine civil rights enforcement, and roll again generations of progress in the direction of financial justice whereas threatening the well being of the economic system,” she mentioned.
The bureau had not responded to HousingWire’s request for remark relating to the NFHA’s opposition when this story was revealed.
An April 2025 directive
The proposal builds upon an April 2025 order from the Trump Administration that directs federal businesses to cease utilizing the authorized idea generally known as “disparate‑influence legal responsibility” when implementing civil rights legal guidelines.
Per the order, requiring corporations to forestall discriminatory outcomes in apply can encourage favoritism. “Disparate-impact legal responsibility has hindered companies from making hiring and different employment selections based mostly on benefit and talent, their wants, or the wants of their prospects due to the specter that such a course of would possibly result in disparate outcomes, and thus disparate-impact lawsuits,” the order reads.
The CFPB is searching for public touch upon the proposal by Dec. 15.
