On May 27, 2026, Relman Colfax filed a suit in federal court on behalf of fair housing advocates and fair lending firms to stop a devastating Consumer Financial Protection Bureau (CFPB) rule that reverses 50 years of fair lending protections and opens the door to widespread discrimination against women, Black, Latino, Asian, Hawaiian, Pacific Islander, and Native people, the elderly, and other underserved communities that have long been denied a fair chance to receive safe and affordable credit.
Relman Colfax, alongside co-counsel Public Citizen and Democracy Forward, represents the National Fair Housing Alliance (NFHA), Rise Economy, and fair lending compliance firms BLDS, LLC, and SolasAI.
The suit challenges a final rule the CFPB issued on April 22, 2026 implementing the Equal Credit Opportunity Act (ECOA), the nation’s landmark civil rights law protecting against credit discrimination. These rollbacks, if allowed to proceed, will have devastating effects on protections and programs that, over five decades, have worked to prevent discrimination and expand access to fair lending.
The Final Rule:
- Eliminates disparate impact under ECOA, increasing the risk that lenders will use policies and algorithms that arbitrarily and wrongly exclude protected groups so long as discriminatory intent cannot be proven. This gives lenders the green light to use credit models that unnecessarily exclude creditworthy people, without any requirement to seek fairer alternatives.
- Narrows the prohibition against inappropriately discouraging people from applying for loans so severely that regulators will be permitted to ignore some of the most pervasive forms of discriminatory discouragement, including digital redlining. The change heightens the possibility that lenders will, for example, exclusively market loans to predominately White neighborhoods, leaving Black, Latino, Asian, Hawaiian, Pacific Islander, and Native communities reliant on risky, high-cost lenders that offer predatory loans with exorbitant interest rates.
- Effectively eliminates the use of Special Purpose Credit Programs (SPCP) by for-profit institutions. SPCPs generated more than $17 billion in economic activity from 2022 to 2024 alone.
The lawsuit asks the court to vacate the rule, alleging that it was arbitrary, capricious, contrary to law and evidence, and in excess of statutory authority. The CFPB’s rulemaking process was also flawed by issuing the Notice of Proposed Rulemaking (NPRM) without undertaking an Initial Regulatory Flexibility Analysis and without convening a Small Business Regulatory Enforcement Fairness Act panel, as required by the Small Business Regulatory Enforcement Fairness Act of 1996. The NPRM did not provide enough time for commenters to gather data on the impact of the rule, something the CFPB also failed to do. The CFPB then failed to conduct a Final Regulatory Flexibility Analysis and, although the Final Rule acknowledged many comments, it failed to respond to many significant comments or simply asserted it was not persuaded, without giving a reasoned explanation.
The complaint was filed in the U.S. District Court for the District of Columbia and names the CFPB and Acting Director Russell Vought as defendants.
The Relman Colfax team consists of Stephen Hayes, Lila Miller, Tim Lambert, and Valerie Comenencia Ortiz.