In a move that’s making waves across the lending world, seven federal agencies just collectively said “never mind” to a policy statement they put out back in 2022.
Think of it as the regulatory equivalent of unsending a risky text.
The Department of Housing and Urban Development (HUD) is leading the charge, joined by an alphabet soup of agencies: the CFPB, DOJ, FDIC, NCUA, OCC, and FHFA. Together, they’ve officially rescinded what’s known as the Interagency Statement on Special Purpose Credit Programs Under the Equal Credit Opportunity Act and Regulation B.
Here’s what actually happened: The original statement dropped in February 2022 during the Biden administration. It essentially gave lenders a green light to create special purpose credit programs—or SPCPs, if you’re into acronyms—that would favor certain groups of Americans over others. The idea was to promote access to credit for underserved communities, but the approach involved treating different classes of borrowers differently.
Now, with this rescission, the message to lenders is clear: don’t count on that 2022 guidance anymore. The agencies are making it explicit that creditors were never supposed to discriminate based on protected characteristics like race, gender, or national origin. Going forward, financial institutions shouldn’t rely on the Interagency Statement, previous guidance on this topic, or any related materials that encouraged these types of programs.
This joint statement captures President Trump’s vision of restoring a merit-based system, due process, and equal treatment under the law for all Americans. This approach addresses the harmful effects of promoting unlawful preferences based on protected characteristics as outlined in Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” and Executive Order 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing.”
“No regulation or interagency statement fixated on the Biden administration’s DEI commitments can defeat the Fair Housing Act’s categorical prohibition against discriminating on the basis of race and color in any residential real estate-related transaction,” said HUD Assistant Secretary for Fair Housing and Equal Opportunity Craig Trainor. “Credit decisions must be made on economically relevant criteria and never on race or other protected characteristics. Under Secretary Turner’s leadership, HUD will never again be in the sordid business of divvying up Americans by race.”
“It is illegal to favor individuals for housing benefits, mortgage loans, or any credit programs based on protected characteristics like race,” said DOJ Assistant Attorney General for Civil Rights Harmeet Dhillon. “This DOJ will defend the civil rights of all Americans and enforce the law to ensure widespread discrimination caused by ‘equity’ efforts is relegated to the history books alongside Jim Crow and other historical systems of discrimination.”
What does this mean in practical terms? Lenders need to take a fresh look at their credit programs and make sure they’re not leaning on outdated guidance that’s now been pulled from the playbook. It’s a significant shift that affects how financial institutions think about fair lending and equal credit opportunity.