HUD Leads Interagency SPCP Statement Rescission: 2022 Guidance Nullified

• On August 25, 2026, HUD, CFPB, DOJ, FDIC, NCUA, OCC, and FHFA jointly rescinded the 2022 Interagency Statement on Special Purpose Credit Programs.
• The original 2022 statement, issued by the Biden administration, had encouraged SPCPs under ECOA and Regulation B that the current administration viewed as favoring certain classes.
• Creditors are now explicitly directed not to rely on the rescinded guidance or any related previous issuances.
• This action aligns with President Trump’s vision to restore a merit-based system and eliminate unlawful preferences based on protected characteristics, as outlined in Executive Orders 14173 and 14151.
• Federal officials stress that credit decisions must be based solely on economically relevant criteria, never on race or other protected characteristics.

Credit decisions must be made on economically relevant criteria and never on race or other protected characteristics.

A significant shift in federal fair lending policy occurred on August 25, 2026, as the Department of Housing and Urban Development (HUD) led a joint interagency effort to rescind the 2022 Interagency Statement on Special Purpose Credit Programs Under the Equal Credit Opportunity Act and Regulation B. This pivotal action, which saw the participation of the Consumer Financial Protection Bureau (CFPB), the Department of Justice (DOJ), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Federal Housing Finance Agency (FHFA), effectively nullifies previous guidance that encouraged certain types of credit programs.

This rescission directly targets the February 2022 statement, which originated under the Biden administration. That earlier guidance had been interpreted by the current administration as promoting the development of Special Purpose Credit Programs (SPCPs) in a manner that could favor specific demographic groups. With this new directive, the collective message to creditors is clear: any reliance on the now-rescinded Interagency Statement, or any related previous guidance, is no longer appropriate or supported by federal regulators.

The immediate consequence for financial institutions is the necessity to re-evaluate their existing SPCPs and credit practices. While the fundamental prohibition against discriminating based on protected characteristics has always remained in force, this credit discrimination policy change underscores a renewed emphasis on universal, merit-based criteria. The 2022 SPCP statement rescinded by this broad coalition of agencies signals a definitive move away from policies perceived to create preferences based on protected characteristics.

The rescission aligns with President Trump’s stated vision for restoring a merit-based system, ensuring due process, and upholding equal treatment under the law for all Americans. This approach is designed to counter what the administration views as the harmful effects of promoting unlawful preferences based on protected characteristics, a stance articulated in Executive Order 14173, titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” and Executive Order 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing.” These executive orders provide the foundational policy framework for the current administration's stance on fair lending practices.

The original Interagency Statement on Special Purpose Credit Programs, issued in 2022, had provided guidance on how creditors could establish SPCPs under the Equal Credit Opportunity Act (ECOA) and its implementing Regulation B. However, the current administration's interpretation is that this guidance inadvertently encouraged programs that could be seen as favoring one class of Americans over another. The new interagency consensus emphasizes that credit decisions must be made solely on economically relevant criteria, rather than on factors such as race or other protected characteristics, thereby reinforcing the principle of fair lending merit-based criteria.

The implications for creditors are substantial, requiring an immediate cessation of reliance on the rescinded 2022 Interagency Statement. All existing Special Purpose Credit Programs must now be rigorously reviewed to ensure they align with a strict merit-based, economically relevant criteria approach, avoiding any programs that could be interpreted as unlawful preferences based on protected characteristics. This policy shift signals a heightened regulatory scrutiny on any credit programs that might appear to differentiate applicants based on protected classes.

HUD Assistant Secretary for Fair Housing and Equal Opportunity, Craig Trainor, emphasized that no regulation or interagency statement, regardless of its origin, can override the Fair Housing Act’s categorical prohibition against discrimination based on race and color in residential real estate transactions. He further stated that credit decisions must be based on economically relevant criteria and never on race or other protected characteristics, asserting that under Secretary Turner’s leadership, HUD will no longer be involved in categorizing Americans by race. Similarly, DOJ Assistant Attorney General for Civil Rights, Harmeet Dhillon, affirmed the illegality of favoring individuals for housing benefits, mortgage loans, or any credit programs based on protected characteristics like race, pledging that the DOJ will defend the civil rights of all Americans and enforce the law to combat discrimination stemming from 'equity' efforts.

Creditors must immediately cease reliance on the rescinded 2022 Interagency Statement and review all existing Special Purpose Credit Programs (SPCPs) to ensure they align with a strict merit-based, economically relevant criteria approach, avoiding any programs that could be interpreted as unlawful preferences based on protected characteristics. Compliance officers should update internal policies and training to reflect this shift in regulatory guidance and enforcement priorities.

Source: Original reporting via press release