On February 23, eight federal agencies including the CFPB, FDIC, OCC, Federal Reserve Board, NCUA, HUD, DOJ, and FHFA issued an interagency statement to remind creditors of the ability under the ECOA and Regulation B to establish special purpose credit programs (SPCPs) to meet the credit needs of specified classes of persons. According to an accompanying blog, the CFPB stated that “lenders are permitted to design and implement SPCPs to extend credit to a class of persons who would otherwise be denied credit or would receive it on less favorable terms, under certain conditions.”

ECOA and Regulation B make it unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction on the basis of race, color, religion, national origin, or sex. Lenders may, however, favorably consider prohibited factors such as race or ethnicity in connection with SPCPs. While encouraging creditors to explore opportunities to develop SPCPs consistent with ECOA and Regulation B, the interagency statement described previous CFPB guidance issued to help to explain how lenders can offer or participate in a SPCP. In addition, the agencies described recent HUD guidance confirming SPCPs for real estate loans or credit assistance, that are compliant with ECOA and Regulation B, generally would not violate the Fair Housing Act.

Putting it Into Practice: Creditors considering SPCPs are encouraged to develop such programs consistent with ECOA and Regulation B requirements as well as applicable safe and sound lending principles.