A recent Trump administration directive may have sealed the fate of so-called special purpose credit programs, which a number of lenders had used to boost lending to minority communities. But for banks, the writing had already been on the wall for months.
On Tuesday, a notice by federal regulators officially rescinded Biden-era guidance that encouraged the programs, which the new notice called "discriminatory." But this was only the last in a long series of government orders that made it clear the programs had fallen out of favor.
"This was almost a housekeeping matter," Richard Andreano Jr., head of the mortgage banking group at the law firm Ballard Spahr, told American Banker. "We were waiting for the inter-agency statement to get withdrawn, and they finally got around to it."
At least two big banks didn't wait for the latest guidance to shelve their programs. A
SPCPs were created by the Equal Credit Opportunity Act, a 1974 law that prohibited lenders from discriminating against borrowers based on their race, gender, national origin and other personal traits.
The enforcement mechanism of the law, Regulation B, went a step further: Not only did it forbid discrimination, it also permitted the creation of programs to actively extend credit to historically disadvantaged groups.
But the legality of such programs remained somewhat murky, so many lenders remained reluctant to create them. In an effort to fix that, regulators under the Joe Biden administration issued a
Then the floodgates opened. A large number of big banks — including JPMorgan,
The
In 2022, JPMorgan said it was
Neither of the latter two banks responded Wednesday to American Banker's request for comment on the status of their programs.
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According to consumer advocacy groups, the programs made a difference. The National Fair Housing Alliance has estimated that from 2022 to 2024, SPCPs cut the borrowing costs of 57,282 consumers by a total of $82 million, and generated $17.2 billion in economic activity.
"They worked," NFHA Executive Vice President Nikitra Bailey told American Banker by email. "These programs surface creditworthy borrowers that conventional models exclude, which expands a lender's customer base."
But after Donald Trump returned to the White House, the tide shifted. Both the Consumer Financial Protection Bureau and the U.S. Department of Housing and Urban Development withdrew their guidance encouraging SPCPs.
And in April 2026, the CFPB dramatically "amended" Regulation B. Under the bureau's new interpretation, the law did not encourage, but in fact banned for-profit creditors from offering SPCPs on the basis of race, color, national origin or gender. The amendment took effect in July.
At that point, Andreano said, banks knew the time for SPCPs was over.
"That really was what ended depositories offering these programs," he said.
The impact of this reversal, the NFHA says, will be felt most acutely by the would-be homeowners and other consumers who could have benefited from antidiscrimination programs.
"The people who get hurt are the ones SPCPs were built to reach: Black, Latino, Native American, Alaska Native, Native Hawaiian, Pacific Islander, and Asian borrowers whose families were shut out of federal homeownership programs for generations," Bailey said. "These borrowers will get pushed toward predatory and high-cost lenders selling products that drain wealth instead of building it."
But the story of SPCPs may not be over. In May, the NFHA sued the CFPB over its rule change, and that lawsuit is still pending.
"We'll keep fighting to expand fair access to credit and protect affordable homeownership opportunities for all of the people of America," Bailey said.
