In response to news that federal regulators are retreating from disparate impact analysis and restricting the use of Special Purpose Credit Programs (SPCPs) in new Equal Credit Opportunity Act (ECOA) rulemaking, the National Community Reinvestment Coalition (NCRC) issued the following statement from NCRC President and CEO Jesse Van Tol:
America is based on the promise that every one of us will get a fair shot at making the most of our abilities. Laws like ECOA are how we keep that promise. We have a national duty to hold ourselves and our capital markets accountable to the principles of anti-discrimination and fairness that earned the United States such nicknames as “the land of opportunity” and “the leader of the free world.”
It’s disturbing and backward to undermine small businesses and marginalized communities by weakening antidiscrimination enforcement and stymieing financial innovation. But that’s exactly what those currently in charge of the regulatory apparatus are doing.
This proposal is an outright assault on civil rights in lending. By gutting disparate impact analysis and banning race- or gender-based Special Purpose Credit Programs (SPCPs), this rule will effectively invite a return to redlining and exclusion.
Disparate impact analysis is a simple and critical tool in maintaining the nation’s reputation and vindicating its ideals. And SPCPs are an efficient and effective tool for lenders to not only fulfill their responsibilities under the law but generate new and long-lasting customer relationships that unlock untapped potential in neighborhoods and rural counties all over the country.
