Senate Democrats Press CFPB to Rescind Proposal to Eliminate Fair Lending Test

Senate Democrats urged CFPB Acting Director Russell Vought to rescind a proposed rule to eliminate the "disparate impact" test under the Equal Credit Opportunity Act.

In the letter, Senators Raphael Warnock, Elizabeth Warren, and eight colleagues argued that the proposal contradicts fifty years of legal precedent and Supreme Court rulings. They contended that eliminating the test would "open the floodgates for discrimination" by allowing lenders to adopt facially neutral policies that disproportionately harm marginalized groups. The lawmakers highlighted that the rule would jeopardize Special Purpose Credit Programs designed to expand homeownership, warning that the change would widen the wealth gap and increase borrowing costs. To underscore current disparities, they noted that "Black mortgage applicants were more than two times more likely to be denied than White applicants with similar profiles, while Latino and Asian mortgage applicants were 1.5 and 1.2 times more likely, respectively, to be denied compared to White applicants."

The Senators characterized the proposal as an "unsubstantiated ideological crusade" intended to dismantle civil rights protections on behalf of industry interests. The group requested that the CFPB rescind the proposed rule to ensure nondiscriminatory access to credit across mortgage, credit card, and automotive lending markets.

The Senators asked the CFPB to provide a briefing on its efforts to rescind the rule by February 10, 2026.