Special Purpose Credit Programs

Abstract

The Equal Credit Opportunity Act (ECOA) offers creditors a powerful tool for addressing lending disparities for historically underserved groups: Special Purpose Credit Programs (SPCPs). SPCPs provide a targeted means for creditors to meet special social needs and benefit economically disadvantaged groups, including groups that share a common characteristic such as race, national origin, or sex. As this paper details, SPCPs align with and do not violate other antidiscrimination laws that generally prohibit lending discrimination, including the Fair Housing Act (FHA) and sections 1981 and 1982 of the Civil Rights Act. That conclusion follows from established canons of statutory construction, ensures these statutes are harmonized (not nullified), is consistent with case law approving protected-class conscious programs across antidiscrimination laws, and is supported by regulatory materials, legislative history, and agencies’ own FHA obligations to affirmatively further fair housing.