The CFPB has rescinded a December 2020 advisory opinion that addressed Special Purpose Credit Programs (SPCP) offered by for-profit entities that use the common characteristics of race, color, national origin, or sex, or any combination thereof, as eligibility criteria. The advisory opinion had addressed the content of the written plan that would have been required for the SPCP and the data that could have been used to support a determination that the SPCP was necessary because people sharing those characteristics probably would not have received credit or would have received it on less favorable terms that those ordinarily available to other applicants. The CFPB stated it “has determined that the advisory opinion should be rescinded, as it is now outdated and inconsistent with the recent amendments to Regulation B” under the Equal Credit Opportunity Act.
Among other changes, the April 2026 amendments prohibit the use of the race, color, national origin, or sex, or any combination thereof, of the applicant as a common characteristic or factor in determining eligibility for a SPCP offered by a for-profit entity. While the amendments allow the use of religion, marital status, age or the receipt of public assistance income, or any combination thereof, in a SPCP offered by a for-profit entity, they add more stringent requirements, including a requirement that the for-profit entity document why the use of those characteristics is necessary and a requirement that it show that absent the SPCP persons sharing those characteristics would not have received credit at all. No changes were made regarding SPCPs offered by governmental or non-profit entities.
The bureau made the change on the basis that there was no evidence “that SPCPs based on race, color, national origin, or sex remain necessary to serve the narrow original purpose of ECOA’s SPCP provisions.” As a result, “the Bureau determined that it is no longer appropriate, necessary, or proper for the SPCP standards in Regulation B to permit such programs to use the common characteristics of race, color, national origin, or sex as eligibility criteria.” The amendments are being challenged in a lawsuit.
The CFPB noted that “the recent amendments to the SPCP provisions of Regulation B added new requirements to the written plan requirement that for-profit organizations offering or participating in an SPCP must satisfy.. The advisory opinion, of course, does not address these new requirements. Thus, the advisory opinion is no longer current.”
