OriginatorExam

Bulletin

Regulation B disparate impact rule, July 2026

From July 21, 2026 Regulation B s. 1002.6(a) says ECOA does not provide that the effects test applies. The rule changed Regulation B only.

Published
2026-09-16
Takes effect
2026-07-21

The Regulation B disparate impact rule changed on July 21, 2026. From that date, 12 CFR s. 1002.6(a) says that the Equal Credit Opportunity Act (ECOA) “does not provide that the ‘effects test’ applies for determining whether there is discrimination in violation of the Act.” Until July 20, 2026 the same paragraph said the opposite. The amendment came in a Consumer Financial Protection Bureau (CFPB) final rule, Equal Credit Opportunity Act (Regulation B), 91 FR 21620, published April 22, 2026 and effective July 21, 2026.

Old wording and new wording, side by side

The amendatory instructions revise s. 1002.4(b); s. 1002.6(a); s. 1002.8 at paragraphs (a)(3)(i), (a)(3)(ii), the heading of (b), (b)(2), new (b)(3) and (b)(4), and (c); and s. 1002.15(d)(1)(ii), and rewrite the Supplement I commentary under 2(p), 4(b), 6(a), 8(a), 8(b) and 8(c).

ProvisionBefore July 21, 2026From July 21, 2026
s. 1002.6(a), second sentenceThe legislative history of the Act indicates that Congress intended an “effects test” concept, as outlined in Griggs and Albemarle Paper Co., to apply to a creditor’s determination of creditworthinessThe Act “does not provide that the ‘effects test’ applies for determining whether there is discrimination in violation of the Act”
s. 1002.4(b), discouragementNo statement “that would discourage on a prohibited basis a reasonable person from making or pursuing an application”No statement the creditor “knows or should know would cause a reasonable person to believe” the creditor would deny or worsen terms on a prohibited basis, with visual images included
s. 1002.8(a)(3)(ii), who a for-profit program is forA class who, under the organization’s customary standards of creditworthiness, “probably would not receive such credit or would receive it on less favorable terms”A class who, under the organization’s standards of creditworthiness, “would not receive such credit”
s. 1002.8(b), special purpose credit programsParticipants could share one or more common characteristics that would otherwise be a prohibited basisSame, but subject to two new conditions in (b)(3) and (b)(4)
Supplement I, comment 6(a)-2Explained the effects test and gave an exampleRetitled “Disparate treatment” and rewritten
Supplement I, comment 4(b)-2Said creditors may affirmatively solicit members of traditionally disadvantaged groupsRemoved
Supplement I, comment 2(p)-4Titled “Effects test and disparate treatment”, and said neutral factors in a credit scoring system could be challenged under the effects test, citing comment 6(a)-2“Effects test” struck from the title, and that sentence and the cross-reference deleted

The Bureau called the removal of comment 4(b)-2 a non-substantive change, because final comment 4(b)-1 already says that encouraging one group of customers to apply does not discourage another.

Discouragement now names symbols, photographs and videos

Section 1002.4(b) carries two changes a loan originator sees in daily work. The test is now what the creditor knows or should know would cause a reasonable person to believe an application would be denied or granted on less favorable terms because of a prohibited basis characteristic. And a closing sentence sets the reach: “oral or written statements are spoken or written words, or visual images such as symbols, photographs, or videos.”

An advertisement is covered, and so is a spoken remark at the counter. The pre-July wording carried no knowledge element at all.

Special purpose credit programs took two new conditions

A special purpose credit program (SPCP) is one a creditor may run for a defined class of people without that being discrimination under ECOA. Section 701(c)(3) of ECOA, 15 USC s. 1691(c)(3), allows one from a profit-making organization on standards the Bureau writes, and s. 1002.8 holds them.

From July 21, 2026, s. 1002.8(b)(3) bars a program offered by a for-profit organization from using race, color, national origin or sex, or any combination of them, as a common characteristic or factor in deciding eligibility. For characteristics (b)(3) does not reach, s. 1002.8(b)(4) requires the for-profit organization to hold evidence, for each participant who receives credit, that the participant would not have received that credit in the absence of the program as a result of those specific characteristics. Programs authorized by federal or state law under s. 1002.8(a)(1), and not-for-profit programs under s. 1002.8(a)(2), are outside both new paragraphs.

The rule also struck the reference to prospective applicants from s. 1002.15(d)(1)(ii), the general rule on when a privileged self-test report may not be obtained or used. Loss of privilege sits in s. 1002.15(d)(2) and was untouched.

Two pieces of guidance came down after the rule

The CFPB rescinded its December 2020 advisory opinion on for-profit special purpose credit programs on June 17, 2026, 91 FR 36518, on the stated ground that it conflicted with the April 2026 amendments: it said participants could be required to share common characteristics, with race, national origin and sex as the examples, and s. 1002.8(b)(3) now forbids those as eligibility factors.

On August 25, 2026 seven agencies jointly rescinded the February 2022 Interagency Statement on Special Purpose Credit Programs, FR Doc 2026-17307: the Department of Housing and Urban Development (HUD), the CFPB, the Department of Justice, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency and the Federal Housing Finance Agency. HUD’s announcement says creditors should not rely on the interagency statement, previous guidance or other related issuances going forward.

The FTC said it will not bring disparate impact claims

On August 7, 2026 the Federal Trade Commission (FTC) announced a policy statement that the Commission will not pursue claims based on disparate-impact or “unfair discrimination” theories, while continuing to assert disparate-treatment claims under ECOA. The vote was 2 to 0. An FTC enforcement policy binds the FTC and changes no regulation.

The Fair Housing Act is a separate statute

ECOA and the Fair Housing Act are two different laws with two different regulators, and the April 2026 rule amended Regulation B only. 24 CFR s. 100.500, HUD’s rule under the Fair Housing Act, still says liability “may be established under the Fair Housing Act based on a practice’s discriminatory effect” and that this holds “even if the practice was not motivated by a discriminatory intent.” That section was last amended on May 1, 2023 and carries its three-step burden-shifting framework in paragraph (c). A residential mortgage transaction can sit under both statutes at once.

Which text was in force when

The FFIEC Interagency Fair Lending Examination Procedures of August 2009, page 6, still describe disparate impact as a method of proof under both the Fair Housing Act and ECOA. That document has not been reissued on the copy this site reads, so it states the pre-2026 position for ECOA. Three dates keep the picture straight: the Fair Housing Act regulation as amended May 1, 2023, Regulation B as it read until July 20, 2026, and Regulation B as amended July 21, 2026.

The rule left the rest of Regulation B alone. The ECOA notification and valuation clocks in ss. 1002.9 and 1002.14 run exactly as they did before July 21, 2026, and so does the adverse action notice content in s. 1002.9(a)(2).

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