Banking and Finance Law Daily Wrap Up, EQUAL CREDIT OPPORTUNITY—CFPB publishes revised ECOA baseline review procedures, (Jul 24, 2026)

By Justin Marcus Smith, J.D.

The revisions follow removal of the “effects test” in April 2026.

The Consumer Financial Protection Bureau (CFPB) has posted revised Equal Credit Opportunity Act (ECOA) Examination Procedures on July 23, 2026. Revisions pertain to ECOA baseline review; mortgage servicing examination; and reverse mortgage servicing examination.

Baseline review. The CFPB conducts ECOA baseline reviews in addition to ECOA targeted reviews and Home Mortgage Disclosure Act (HMDA) reviews. CFPB examiners will use five discrete ECOA Baseline Review Modules to identify and analyze ECOA violation risk; facilitate identification of certain ECOA and Regulation B violations; and to inform fair lending prioritization decisions for future CFPB reviews.

The five modules address, in turn: (1) supervisory history; (2) compliance management; (3) origination risks; (4) servicing risks; and (5) risks to related models. All ECOA Baseline Reviews will include Module 2 review of the Fair Lending Compliance Management System with two objectives: (a) to understand the examined entity’s compliance management system for identifying and managing ECOA fair lending risks; and (b) to identify and analyze the risk of potential ECOA violations.

Mortgage servicing. There are a total of 9 modules in the Mortgage Servicing examination covering routine servicing, default servicing, and foreclosure. Examiner conclusions and wrap-up are module 10. Objectives include (1) assessing the quality of the regulated entity’s compliance risk management systems; (2) identifying materially risky acts or practices; (3) gathering facts to help determine whether the entity engages in acts or practices that are likely to violate Federal consumer financial law in connection with mortgage servicing; and (4) determining whether such violations have occurred and what to do about them.

Reverse mortgage servicing. Reverse mortgage servicing examination procedures are a “stand-alone” resource to complete a reverse mortgaging service review. Per the procedures, examiners should complete a risk assessment and an examination scope memorandum beforehand. Mortgage servicing reviews may involve up to 7 modules covering, for example, information sharing and privacy, plus the examiner conclusions and wrap-up module.

Objectives include: (1) identifying acts or practices that materially risk violation of federal consumer financial laws; (2) gathering facts to help identify whether a regulated entity engages in acts or practices that violate federal consumer financial laws; and (3) determining whether such violations have occurred and what supervisory or enforcement actions should be taken.

Regulation B. Regulation B has two basic and comprehensive prohibitions against discriminatory lending practices: (1) a creditor shall not discriminate against an applicant on a prohibited basis about any aspect of the credit transaction; (2) a creditor shall not make statements to applicants or prospective applicants that would lead them to believe the creditor would deny credit or grant credit on less favorable terms based on an applicant’s prohibited basis characteristic.

In January 2013, the CFPB amended Regulation B to reflect amendments to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requiring creditors to provide first mortgage applicants with free copies of appraisals and other written valuations.

In April 2026, the CFPB further amended Regulation B provisions to remove the “effects test” from the regulation. It also affirmatively stated that the ECOA does not recognize disparate-impact liability. It also modified the prohibition on “discouragement” to focus on statements of intent to discriminate, not statements that merely create negative impressions. Last, the rule prohibited creditors from using race, color, national origin, or sex as common characteristics under Special Purpose Credit Programs (SPCPs). The hope was that the amendments would facilitate ECOA compliance.

CFPB authority. The ECOA, as implemented by Regulation B, applies to all creditors. The Dodd-Frank Act transferred regulatory authority from the Federal Reserve Board to the CFPB. CFPB presently has promulgating, supervisory, and enforcement authority for ECOA and its implementing regulations. Regulation B covers creditor activities before, during, and after extension of credit.

For fair lending scoping and examination procedures pertinent to the Fair Housing Act, the CFPB is temporarily adopting the FFIEC Interagency Fair Lending Examination Procedures referenced in the examination program. However, it does not treat those procedures as pertinent to a federal consumer financial law because the Fair Housing Act, unlike ECOA, is not a federal consumer financial law as defined by the Dodd-Frank Act.

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