By Douglas Gillison
WASHINGTON, March 31 (Reuters) – The U.S. federal watchdog agency for consumer finance expects to finalize new regulations proposed in November that would narrow key civil-rights-era antidiscrimination requirements for lenders, according to a government website.
The new policy from the Consumer Financial Protection Bureau would free banks and others from a decades-old requirement to prevent discriminatory impacts on women and minorities, instead focusing solely on preventing explicitly discriminatory conduct.
Representatives for both the Office of Management and Budget and the CFPB did not immediately respond to requests for comment on Tuesday.
The change makes good on an executive order President Donald Trump issued a year ago, which said requiring companies to prevent “disparate impact” encourages favoritism and unfairly burdens companies.
The website of OMB, an arm of the president’s office also controlled by the CFPB’s Acting Director Russell Vought, showed on Tuesday that a final version of the regulation was now under review with “no material change” from November’s proposed version.
It was unclear when the CFPB would be ready to adopt the new rule or whether OMB experts would recommend any changes.
The new rule comes over the objections of fair-lending and pro-consumer advocates who say such a change flies in the face of lawmakers’ intent when they adopted the 1974 Equal Credit Opportunity Act and subsequent reforms. Industry groups, however, said they supported the proposal as it would free banks and others from unnecessary compliance burdens and legal liabilities.
(Reporting by Douglas Gillison in Washington; Editing by Mark Porter)
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