Cfpb’s Ecoa Proposal Raises Alarms Over Women’s Ability To Get A Mortgage

The Consumer Financial Protection Bureau (CFPB) is proposing changes to rules under the Equal Credit Opportunity Act (ECOA) to clarify lenders’ responsibilities on issues including disparate impact, discouragement of applicants and special purpose credit programs (SPCPs) that industry leaders say could hurt women’s ability to get a mortgage loan in their own name. The comment period for the proposal ends on Dec. 15.

The proposal, published on Nov. 13 in the Federal Register, would remove the agency’s recognition of “disparate impact” claims, which allow borrowers to challenge policies that disproportionately harm certain groups, even without evidence of intentional discrimination.

After the proposal was published, Nikitra Bailey, executive vice president at the National Fair Housing Alliance (NFHA) testified before Congress about her reasons for opposing the change and has now released a video on YouTube that outlines her concerns.

“ECOA became the law in 1974 and it stops banks from denying you a loan or a credit card because of who you are and things that you cannot control, like your race, your gender, your skin color, your religion, your age and whether or not you’re married,” Bailey says in the video. “This is a law that gave us women the ability to go into a bank and get a fair loan for a home without having a male co-signer sign on our behalf.”

Mortgage industry veteran Faith Schwartz, founder and CEO of Housing Finance Strategies, shared Bailey’s video on LinkedIn and urged mortgage leaders to provide feedback to the CFPB before the comment period ends on Dec. 15. It has now been reshared by others and the comments suggest the issue had flown under the wire for many in the industry, who expressed shock at the proposal.

What’s in the proposal?

In addition to removing the CFPB’s recognition of disparate impact claims, the proposal would also tighten the definition of what counts as discouraging applicants — reducing the situations in which lenders could be held responsible for actions or statements that might deter people from applying for credit.

Additionally, the rule would revise the standards for SPCPs, which allow lenders to offer targeted loans to underserved groups without violating the law.

The proposal said that the changes are intended to clarify lenders’ obligations and make it easier to comply with the law. Critics, including fair lending advocates, warned that the proposal could reduce access to credit for women, communities of color and rural residents.

NFHA released a public statement when the proposal was announced saying it “vehemently opposes” the changes. NFHA President and CEO Lisa Rice called the proposed rule change “unconscionable” and said it “must never come into effect.”

Rice continued: “The proposed rule changes are a death knell for lenders. Disparate impact is a business-growth engine and any company that wants to remain viable and competitive will continue to use this critical tool… These actions ignore mounds of evidence revealing ongoing lending bias, are an assault on decades of settled fair lending law and would promote discrimination in our credit markets. They are a continuation of this administration’s attack on protections against redlining. For these reasons and more, this rule must never be promulgated.”

Rice added that by eliminating the longstanding “effects test” under the ECOA, this rule would “strip away one of the most powerful tools for uncovering and remedying systemic bias in lending.”

“This reckless proposal would embolden discriminatory practices, undermine civil rights enforcement, and roll back generations of progress towards economic justice while threatening the health of the economy,” she said.

The bureau had not responded to HousingWire’s request for comment regarding the NFHA’s opposition when this story was published.

An April 2025 directive

The proposal builds upon an April 2025 order from the Trump Administration that directs federal agencies to stop using the legal theory known as “disparate‑impact liability” when enforcing civil rights laws.

Per the order, requiring companies to prevent discriminatory outcomes in practice can encourage favoritism. “Disparate-impact liability has hindered businesses from making hiring and other employment decisions based on merit and skill, their needs, or the needs of their customers because of the specter that such a process might lead to disparate outcomes, and thus disparate-impact lawsuits,” the order reads.

The CFPB is seeking public comment on the proposal by Dec. 15.