Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
National Credit Union Administration
Office of the Comptroller of the Currency
Consumer Financial Protection Bureau
Department of Housing and Urban Development
Department of Justice
Federal Housing Finance Agency
February 22, 2022
The Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), the Consumer Financial Protection Bureau (CFPB or Bureau), the Department of Housing and Urban Development (HUD), the Department of Justice (DOJ), and the Federal Housing Finance Agency (FHFA) (hereafter, the agencies) are issuing this interagency statement to remind creditors of the ability under the Equal Credit Opportunity Act (ECOA) and Regulation B to establish special purpose credit programs to meet the credit needs of specified classes of persons. Many financial institutions have publicly committed billions of dollars to better meet the needs of underserved communities, and this statement calls attention to the special purpose credit options under ECOA and Regulation B.1
ECOA and Regulation B permit creditors to extend special purpose credit offered pursuant to—
- any credit assistance program expressly authorized by Federal or state law for the benefit of an economically disadvantaged class of persons;
- any credit assistance program offered by a not-for-profit organization for the benefit of its members or an economically disadvantaged class of persons; or
- any special purpose credit program offered by a for-profit organization, or in which such an organization participates to meet special social needs, if it meets certain standards prescribed in regulations by the Bureau.2
On December 21, 2020, the CFPB issued an Advisory Opinion (AO) on special purpose credit programs to clarify the content that a for-profit organization must include in a written plan that establishes and administers a special purpose credit program under Regulation B.3 In addition, the AO clarified the type of research and data that may be appropriate to inform a for-profit organization’s determination to establish a special purpose credit program to benefit a specified class of persons.4
Previously, some stakeholders expressed uncertainty as to the treatment of ECOA and Regulation B special purpose credit programs under the Fair Housing Act (FHA).5 On December 7, 2021, HUD released guidance concluding that special purpose credit programs instituted in conformity with ECOA and Regulation B generally do not violate the FHA.6 Accordingly, creditors may consider the use of special purpose credit programs across all types of credit covered by ECOA and Regulation B.
As creditors consider how they may expand access to credit to better address special social needs, the agencies encourage creditors to explore opportunities to develop special purpose credit programs consistent with ECOA and Regulation B requirements as well as applicable safe and sound lending principles.
While the agencies do not determine whether a program qualifies for special purpose credit status, creditors with questions about any aspect of ECOA and Regulation B’s special purpose credit provisions may consult their appropriate regulatory agencies.
Footnotes
1 See Equal Credit Opportunity (Regulation B); Special Purpose Credit Programs, 86 Fed. Reg. 3762, 3764 n.26 (Jan. 15, 2021).
2 See 15 U.S.C. § 1691(c)(1)-(3); 12 C.F.R. § 1002.8(a).
3 See 86 Fed. Reg. at 3762, 3764–65 (Jan. 15, 2021); see also Susan M. Bernard and Patrice Alexander Ficklin, Expanding Access to Credit to Underserved Communities (July 31, 2020) (calling attention to opportunities to develop special purpose credit programs and use of affirmative advertising consistent with the ECOA and Regulation B requirements).
4 See 86 Fed. Reg. at 3765–66.
5 See 42 U.S.C. § 3601 et seq.
6 See https://www.hud.gov/sites/dfiles/GC/documents/Special_Purpose_Credit_Program_OGC_guidance_1s2-6-2021.pdf.