On February 22, 2022, the Federal Reserve Board, FDIC, NCUA, OCC, CFPB, FHFA, DOJ, and HUD (the Agencies) issued an interagency statement to remind creditors of the option to establish special purpose credit programs to meet the credit needs of specified classes of persons under ECOA and Regulation B.
ECOA and Regulation B allow creditors to extend special purpose credit offered pursuant to: (i) any credit assistance programs expressly authorized by federal or state law for the benefit of an economically disadvantaged class of persons; (ii) any credit assistance program offered by a not-for-profit organization for the benefit of its members or an economically disadvantaged class of persons; or (iii) any special purpose credit program offered by a for-profit organization, or in which such an organization participates to meet special social needs, if it meets certain standards prescribed in regulations by the CFPB.
The CFPB has previously issued an Advisory Opinion (AO) on special purpose credit programs to clarify the information necessary to support the need for the program. See WBK’s article on the CFPB’s AO for more details.
The Agencies are encouraging creditors to consider opportunities that will further develop special purpose credit programs consistent with ECOA and Regulation B requirements along with applicable safety and soundness lending principles. Although the Agencies do not determine if a program qualifies for special purpose credit status, they encourage creditors with questions on the subject to consult with their appropriate regulators.