ALEXANDRIA, Va.—The Defense Credit Union Council Tuesday wrote a letter to NCUA Chairman Kyle Hauptman encouraging the agency to align its fair lending supervisory approach with recent federal regulatory guidance and rulings – specifically by removing disparate-impact analysis from examiner reviews.
As CUToday.info reported, on July 14 the Office of the Comptroller of the Currency announced it had “removed references to supervising banks for disparate impact liability” from its Fair Lending handbook and instructed examiners that they “should no longer examine for disparate impact.”
This action implements President Trump’s Executive Order 14281 (“Restoring Equality of Opportunity and Meritocracy”), which directs agencies to “deprioritize enforcement” of any regulation involving disparate-impact liability.
“In light of this policy shift, many regulators have signaled a new focus on preventing overt discrimination (disparate treatment) rather than statistical outcomes. We respectfully urge the NCUA to consider a similar update to its examination guidance: credit unions should continue to provide fair access under the law, but examiners need not focus on unintended statistical disparities when no intentional bias exists,” wrote DCUC President and CEO Anthony Hernandez.
Hernandez pointed out the Consumer Financial Protection Bureau has already moved in this direction.
“The CFPB’s 2025 enforcement priorities emphasize ‘clear consumer harm’ and ‘actual intentional racial discrimination’ cases, abandoning actions based solely on statistical redlining or other novel theories,” Hernandez noted.
Hernandez encouraged NCUA to take the following steps in its fair lending oversight:
- Eliminate Disparate-Impact Exams: Revise any NCUA examiner manuals or fair lending bulletins to remove references to disparate-impact risk. “Examiners should not request or evaluate credit unions’ internal disparate-impact analyses or risk assessments. This change would bring NCUA into line with the OCC, which has advised examiners that the supervisory process ‘no longer includes examining for disparate impact liability.’”
- Focus on Intentional Discrimination: Ensure that fair lending exams continue to examine marketing, pricing, and lending practices for actual evidence of intentional discrimination (disparate treatment). “As the OCC noted, its examiners will still conduct risk assessments, analyze HMDA data, and take action when ‘evidence of disparate treatment is found.’ NCUA examiners should likewise focus on explicit discrimination – for example, discouraging credit applications on prohibited bases – rather than statistical disparities.”
- Align with Federal Policy: Make clear that NCUA will “deprioritize” any enforcement based on disparate-impact theories in line with Executive Order 14281. Communicating this change will provide transparency and certainty to federally insured credit unions. A consistent approach among banking and credit union regulators will avoid confusion and reduce duplicative compliance burdens for institutions that operate in both sectors.
- Reduce Regulatory Burden: Acknowledge that disparate-impact analysis imposes significant costs on small institutions without adding meaningful consumer benefit. “As DCUC has noted in other contexts, credit unions already face ‘significant compliance burdens’ under current regulations. Removing an outdated statistical analysis from exam focus will streamline examinations and allow examiners to concentrate on true risk areas, while still protecting members from intentional discrimination.”
Hernandez concluded by noting that NCUA has a long history of promoting fair access to credit, and that credit unions themselves are committed to serving all members equitably.
“Even as we support the general goals of fair lending law, we believe that continuing to emphasize disparate-impact liability is counterproductive given current federal guidance,” Hernandez wrote. “The Supreme Court has upheld disparate-impact claims in the past, but regulators have discretion in supervision priorities, and the Executive Branch’s new policy is clear. DCUC stands ready to work with NCUA exam staff to clarify expectations and implement these changes smoothly.”