WASHINGTON — The National Fair Housing Alliance announced this week that it has filed a federal lawsuit challenging a new rule issued by the Consumer Financial Protection Bureau, arguing the measure dismantles five decades of fair lending protections established under the Equal Credit Opportunity Act and threatens to open the door to widespread discrimination in credit markets.
According to the NFHA, the lawsuit was officially filed in the U.S. District Court for the District of Columbia on May 27, 2026. The coalition argues that the CFPB’s new rule “opens the door to widespread discrimination” against historically marginalized communities.
The release explains that the federal lawsuit challenges CFPB Acting Director Russell Vought’s lawful authority and asks the court to vacate the new rule as “arbitrary, capricious, contrary to law, in excess of statutory authority, and issued outside the procedures Congress requires.”
Despite significant opposition from civil rights groups, consumer advocates and the public, including more than 64,500 comments submitted against the proposal, the CFPB issued the new rule on April 22, 2026.
Janell Byrd-Chichester, general counsel for the NFHA, highlighted what she described as flaws in the rulemaking process, stating that the Bureau “set an unusually short thirty-day public comment period… failed to employ a small business advocacy review panel, and made not a single material change to the rule in response to tens of thousands of comments, the overwhelming majority of which opposed the rule.”
Byrd-Chichester added, “Fairness and equal opportunity in the nation’s credit markets are key to financial wellbeing, family stability, and the success of small businesses… The Administrative Procedure Act exists to prevent rulemaking like this. The court should set this rule aside.”
Protections against lending discrimination have been in place since President Gerald Ford signed the Equal Credit Opportunity Act in 1974. The NFHA noted that for the past 50 years, every administration has enforced these safeguards, regardless of party affiliation.
The ECOA works to ensure access to safe and affordable credit, allowing governments, nonprofit organizations and financial services firms to create Special Purpose Credit Programs, or SPCPs, to expand credit access for underserved communities that historically have been denied fair opportunities.
Lisa Rice, president and CEO of the NFHA, characterized the CFPB’s rule as “the deliberate dismantling of 50 years of legal jurisprudence, regulatory guidance, and bipartisan consensus that lending discrimination has no place in America.”
“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,” Rice stated.
The NFHA detailed three major elements of the new rule, reporting that it would eliminate disparate-impact liability under the ECOA, narrow protections against application discouragement and limit the use of SPCPs, giving lenders greater ability to employ methods of covert exclusion.
Skye Perryman, president and CEO of Democracy Forward, underscored the need for lending safeguards, explaining that as “communities across the country continue to face barriers to homeownership, small business lending, and economic opportunity, the CFPB should be strengthening protections against discrimination, not dismantling them.”
The NFHA is joined by 78 civil rights organizations in formally opposing the CFPB’s rule, with Rise Economy, BLDS LLC and SolasAI serving as co-plaintiffs. The coalition is represented by Relman Colfax PLLC, Public Citizen Litigation Group and Democracy Forward as it seeks to ensure that the decades-long fair lending law remains intact.
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