Banking and Finance Law Daily Wrap Up, EQUAL CREDIT OPPORTUNITY—CFPB releases Fair Lending Report, (Oct 2, 2026)
Organizations Mentioned:Consumer Financial Protection Bureau | National Credit Union Administration | Office of the Comptroller of the Currency
The report highlights the Bureau efforts in transforming its fair lending program “by refocusing its regulatory, supervisory, and enforcement activities on its statutory authority and identified consumer harm.”
The Consumer Financial Protection Bureau’s September 2026 Fair Lending Report for 2025 describes a shift toward matters involving proven, intentional racial discrimination with identifiable victims and away from disparate-impact liability. Consistent with an April 2025 executive order, the Bureau stopped using disparate impact in fair lending supervision and enforcement, closed open examination and investigation elements based on that theory, and terminated related CFPB orders. The Bureau also reported that it neither initiated fair lending supervisory activity nor cited a fair lending violation in 2025. For institutions, the current examination focus is direct evidence and adverse-action compliance, while revised section 1071 requirements narrow reporting coverage and establish a Jan. 1, 2028, compliance date.
Regulation B pivot. Although the report centers on calendar year 2025, it includes selected later developments that the CFPB considered relevant. The agency’s move from disparate impact followed Executive Order 14281, issued Apr. 23, 2025, which directed federal agencies to stop using that theory in civil-rights enforcement. On Apr. 22, 2026, the bureau issued a final Regulation B rule removing the longstanding effects-test language and affirming that the Equal Credit Opportunity Act (ECOA) does not authorize disparate-impact liability. The rule also limited prohibited discouragement statements to spoken or written words and visual images rather than broader acts or practices, including branch placement or advertisement targeting.
The Bureau also stopped consulting with institutions about special purpose credit programs (SPCPs) using race, color, national origin, or sex. Amendments to Regulation B prohibit for-profit creditors from using those characteristics as SPCP eligibility criteria, while programs using religion, marital status, age, or public-assistance income face new documentation and evidentiary requirements.
The CFPB accordingly closed 76 percent of its supervisory actions—nearly 1,500—and most open examinations; about 12 percent of the closed actions involved fair lending. During 2025, however, it initiated no fair lending supervisory activities and cited no fair lending violations. The Bureau says current examinations focus on direct evidence of intentional discrimination, systemic adverse-action notice failures, ECOA and Regulation B risk systems, and the accuracy of key Home Mortgage Disclosure Act (HMDA) data.
Notwithstanding, the CFPB and other agencies collectively reported citing 140 institutions for violations of ECOA, Regulation B, or both in 2025, even though no federal agency with ECOA enforcement authority brought a public ECOA enforcement action. The National Credit Union Administration made four referrals to the Department of Justice—two involving public-assistance income, one involving age and marital status, and one involving age. The Office of the Comptroller of the Currency made one referral involving alleged race, color, or national-origin discrimination in mortgage lending. The CFPB, Federal Deposit Insurance Corporation, and Federal Reserve Board reported no ECOA referrals.
Section 1071 narrowed. The CFPB’s May 1, 2026, revised section 1071 rule substantially reduced coverage. It raised the annual origination threshold for a covered financial institution from 100 to 1,000 loans, excluded Farm Credit System lenders, and lowered the gross annual revenue ceiling for a small business from $5 million to $1 million. It also confined covered transactions to core products such as loans, lines of credit, and credit cards, excluding merchant cash advances, agricultural lending, and small-dollar business credit.
The revised rule, which reduces required data points and simplifies the time and manner of collection, establishes a uniform Jan. 1, 2028, compliance date for covered institutions. The CFPB estimates that the narrower requirements will produce nearly $100 million in one-time savings and between $166 million and $181 million in annual savings.
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