On May 27, 2026, Relman Colfax filed a suit in federal court on behalf of fair housing advocates and fair lending firms to halt 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. 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 permitting regulators 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, with 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.
“This is the deliberate dismantling of 50-years of legal jurisprudence, regulatory guidance, and bipartisan consensus that lending discrimination has no place in America. The statute did not change. The legal decisions did not change. Washington’s commitment did. This reversal by the CFPB is a continuation of this Administration’s efforts to gut fair housing and lending protections. Eviscerating these guardrails will ultimately result in less credit access for many people, make our markets less sound, and cause our economy to be less productive. When the agency built to enforce civil rights and protect consumers walks away from the job, the rule of law remains. That is why we are in court,” said Lisa Rice, President and CEO of the National Fair Housing Alliance.
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 CFPB has ignored public comments, common sense, and decades of precedent in its misguided attempt to turn anti-discrimination law on its head. The CFPB was created to protect consumers and small businesses from financial abuse and discrimination, and this final Reg B rule would do real harm, setting us back in our collective efforts to ensure that all families and small businesses have a fair chance to achieve the American Dream. The Equal Credit Opportunity Act prohibits lending discrimination and encourages the development of Special Purpose Credit Programs to address the effects of past discrimination. These programs help ensure that underserved borrowers and communities have equitable access to credit while also allowing lenders to reach new markets and customers. The CFPB needs to follow the law and return to its core mission of protecting consumers and small businesses,” said Paulina Gonzalez-Brito, CEO of Rise Economy.
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.
Read the full press release by NFHA.