The CFPB’s April 22 Regulation B rewrite arrived in federal court May 27, less than six weeks after publication. The National Fair Housing Alliance, Rise Economy, BLDS, LLC, and AI bias-detection firm SolasAI filed suit in the U.S. District Court for the District of Columbia, challenging all three major provisions.
The CFPB’s April 22 final rule made three cuts to 12 CFR Part 1002: stripped “effects test” references entirely, declaring ECOA doesn’t authorize disparate impact claims; narrowed the discouragement prohibition from a consumer-perception standard to one where the creditor “knows or should know” a statement signals likely denial on a prohibited basis; and barred for-profit creditors from using race, color, national origin, or sex as Special Purpose Credit Program eligibility criteria.
The plaintiffs’ statutory core: ECOA’s prohibition “on the basis of” protected characteristics is the same effects-based language the Supreme Court read in Griggs v. Duke Power Co. to require removal of barriers that discriminate regardless of intent. Congress wrote ECOA with Griggs in mind, they argue, and twice rejected amendments limiting it to intentional discrimination.
I read the FVRA challenge too. The plaintiffs argue Acting Director Russell Vought lacks lawful authority because Rohit Chopra was fired, not resigned — no FVRA vacancy arose. That argument faces steep headwinds given Seila Law, but it’s in the complaint.
The strategic read: the Trump administration may have written this rule to invite exactly this litigation and land ECOA disparate impact before SCOTUS, which has never ruled on it. Lower courts say it applies. If the procedural defects (a 32-day comment period over Thanksgiving, alleged failure to respond to 64,000 comments) kill the rule first, that vehicle stalls.
Worth auditing any fair lending and disparate impact analysis documentation before then.
Rebecca Lauren