Housing Advocacy Groups Sue CFPB to Vacate Final Rule Amending Reg B

Housing advocacy groups have sued the CFPB in D.C. federal court seeking to vacate the agency’s final rule amending Regulation B (which implements ECOA) because the final rule allegedly violates the Administrative Procedures Act (APA) and runs contrary to ECOA, and because the CFPB allegedly lacks authority to make such amendments.

In April 2026, the CFPB issued a final rule amending Regulation B, which: expressly states that ECOA does not provide for disparate impact liability; modifies what constitutes “discouragement” of an applicant or prospective applicant under ECOA; and adds restrictions to Special Purpose Credit Programs (SPCPs).  WBK covered that rulemaking here.

The complaint alleges six legal theories under which the final rule is invalid:

• The final rule is arbitrary and capricious in violation of the APA because it reversed longstanding prior rules without reasoned explanation or supporting evidence.
• The CFPB did not perform a meaningful cost-benefit analysis, as required by the Dodd–Frank Act.
• The final rule runs contrary to the text and purpose of ECOA.
• The CFPB does not have authority to issue a rule that creates safe harbors rendering certain statements immune from liability under ECOA.
• The CFPB did not convene a small business panel, perform an initial regulatory flexibility analysis, perform a final regulatory flexibility analysis, allow for adequate notice and comment, and respond to significant comments as required by various statutes.
• The final rule was issued by an acting director who was not lawfully appointed by the President.

The CFPB has yet to file a motion to dismiss the complaint or file an answer responding to the complaint’s allegations.