CFPB Proposes Material Changes To Equal Credit Opportunity Act Regulations

• Published date: 19 November 2025
• Law Firm: Steptoe LLP
• Author: Mr Andrew Owens, Benjamin Saul, Vito Arethusa and Nathaniel Sans

On November 13, 2025, the Consumer Financial Protection Bureau (CFPB) released two proposed rules that would materially modify Regulation B and fair lending supervision and enforcement generally. Comments on both proposed rules are due by December 13, 2025. Steptoe's Financial Innovation and Regulation group stands ready to assist with answering any questions or to discuss submitting a comment.

Brief Summary

Disparate Impact Proposal. The first rule would narrow certain of Regulation B's restrictions on disparate impact. Specifically, the CFPB would modify Regulation B to: (1) provide that the Equal Credit Opportunity Act (ECOA) does not authorize disparate-impact liability; (2) clarify the scope of "discouragement;" and (3) revise certain requirements applicable to special purpose credit programs (SPCPs).

Small Business Lending Data Collection. The second rule proposes to modify the CFPB's rules, finalized in 2023, implementing Section 1071 of the Consumer Financial Protection Act (CFPA) covering small business data collection. Section 1071 amended ECOA to require that financial institutions collect and report to the CFPB certain data regarding applications for credit for women-owned, minority-owned, and small businesses in order to (1) facilitate enforcement of fair lending laws and (2) enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned, and small businesses. Today's proposed rule would amend the CFPB's 2023 rule generally to restrict the scope of coverage of 1071 to focus on core lending products, lenders, and data rather than cover a broader group of providers and products. Specifically, the proposed rule would: (1) limit the scope of the definition of "covered credit transactions"; (2) limit the scope of the definition of "covered financial institutions"; (3) change the definition of "small business" to reduce the number of covered financial institutions; (4) limit the data points to be collected; (5) remove requirements related to the time and manner of data collection; and (6) extend the rule's compliance date provisions.

Disparate Impact Proposal

1. Applicability of Disparate Impact

a. Current Rule: Regulation B, provides that Congress intended an "effects test" (Effects Test) concept, as established in the employment context by Griggs v. Duke Power Co. 401 U.S. 424 (1971) and Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975), to be used to determine whether a creditor has impermissibly discriminated against an applicant on a prohibited basis. See 12 C.F.R. ' 1002.6. The Commentary further details that creditors may not engage in practices that are facially neutral but that are discriminatory in effect due to their disproportionate negative impact on a prohibited basis, even absent a creditor's intent to discriminate. See Comment 6(a)-2.

b. Proposed Rule: The proposed rule would provide that disparate-impact claims are not applicable under ECOA, and delete language in Regulation B and the associated Commentary describing the Effects Test as a means to identify disparate impact liability, and add language providing that ECOA does not recognize the Effects Test.

2. Scope of "Discouragement"

a. Current...