On 2/22/2022, the FRB, FDIC, NCUA, OCC, CFPB, HUD, DOJ, and the FHFA issued an interagency statement to remind creditors of the ability under the Equal Credit Opportunity Act (ECOA) and Regulation B to establish special purpose credit programs to meet the credit needs of specified classes of persons. The statement focuses on the special purpose credit options under ECOA and Regulation B, which have been publicly committed by many financial institutions to better serve underserved communities.
Highlights of the interagency joint statement include the following:
In an Advisory Opinion (AO) on special purpose credit programs issued on December 21, 2020, the CFPB clarified how a for-profit organization establishes and administers a special purpose credit program under Regulation B. They also clarified the type of research and data that may be appropriate to inform a for-profit organization’s determination to establish a special purpose credit program to benefit a specified class of persons.
On December 7, 2021, HUD released guidance concluding that special purpose credit programs instituted in conformity with ECOA and Regulation B generally do not violate the FHA. Thus, creditors may consider the use of special purpose credit programs across all types of credit covered by ECOA and Regulation B.
Creditors are encouraged to explore the development of special purpose credit programs that comply with Regulation B as well as ECOA requirements to help better address special social needs as credit access is expanded.
The joint statement can be found here.