WASHINGTON—The National Fair Housing Alliance and several allied groups have filed suit against the CFPB, seeking to overturn the agency’s recent rollback of fair lending protections under the Equal Credit Opportunity Act, arguing the changes unlawfully weaken longstanding safeguards against credit discrimination, Reuters reported.
The lawsuit, filed Wednesday in federal court in Washington, challenges a CFPB final rule issued in April that removed “disparate impact” standards from Regulation B, narrowed what qualifies as unlawful discouragement of credit applications, and restricted the use of Special Purpose Credit Programs designed to expand credit access in underserved communities. Plaintiffs include Rise Economy, BLDS LLC and SolasAI, with legal representation from Democracy Forward, Public Citizen Litigation Group and Relman Colfax, Reuters said.
According to the complaint, the revised rule would make it significantly harder to challenge lenders over policies that disproportionately harm Black borrowers, women and other protected groups, even when discrimination is not explicit. The groups also alleged the CFPB ignored overwhelming public opposition during the rulemaking process and violated the Administrative Procedure Act by failing to justify the changes with adequate evidence or analysis.
The litigation marks the latest escalation in the broader fight over federal fair lending oversight under the Trump Administration. Reuters previously reported the CFPB proposed the changes last year as part of a wider deregulatory effort aimed at limiting disparate impact liability and scaling back anti-discrimination enforcement standards.