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Financial Services Law Insights and Observations

CFPB issues advisory opinion on special purpose credit programs

Agency Rule-Making & Guidance CFPB ECOA Regulation B

Agency Rule-Making & Guidance

On December 21, the CFPB issued an advisory opinion addressing ECOA’s implementing regulation, Regulation B, as it applies to certain aspects of special purpose credit programs (SPCPs). The CFPB issued the advisory opinion in response to feedback from the Bureau’s request for information (RFI) covering ECOA and Regulation B issued in July (covered by InfoBytes here). The Bureau notes that, while Regulation B provides creditors guidance for developing SPCPs that comply with ECOA, stakeholders were interested in additional guidance to ensure the development of compliant SPCPs. To address this, the advisory opinion clarifies (i) the content that a for-profit organization must include in an SPCP written plan, including details regarding the class of persons designed to benefit from the program and the procedures for extending credit pursuant to the program; and (ii) the type of research and data that may be appropriate to inform a for-profit organization’s determination that a SPCP would benefit a certain class of people, which can include external sources such as HMDA data.

For more details on the CFPB’s advisory opinion program, please see InfoBytes coverage here.

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