CFPB rescinds Reg B advisory

The Consumer Financial Protection Bureau rescinded an advisory on special-purpose credit programs, or SPCPs, saying it conflicts with a final rule published earlier this year.

Details: The CFPB said:

• It is rescinding its December 2020 advisory opinion regarding Regulation B, which implements the Equal Credit Opportunity Act, as it applies to certain aspects of SPCPs implemented by for-profit organizations to meet special social needs.

• The advisory opinion contains statements that conflict with recent amendments to Regulation B, such as saying that all program participants in an SPCP offered or participated in by a for-profit organization may be required to share one or more common characteristics (such as race, national origin, or sex).

CFPB Rule: The CFPB in April published a final rule to amend provisions related to Regulation B. The rule prohibits lenders from offering SPCPs that use race, color, national origin, or sex as eligibility criteria.

ICBA View: ICBA in December said the CFPB’s proposal would reduce regulatory uncertainty and protect community banks from costly litigation but needs to be refined.