The headline of the CFPB's new Regulation B is that ECOA no longer bars disparate impact. But for non-mortgage lenders, a quieter clause matters more: its intent-based proxy test is direction-agnostic, reaching variables used to advantage or disadvantage a protected class alike. That language captures exactly how modern algorithmically-debiased "less discriminatory alternative" credit models work—recasting a former compliance tool as potential disparate treatment.

The 2025 EO didn't kill disparate impact — SCOTUS settled that in Inclusive Communities. But agency enforcement overreach may have invited the blow.

A recent CFPB publication directs lenders to use race-based debiasing methods for their credit models. Why is this a serious problem?

This article examines the further risks and challenges of using less discriminatory alternative (LDA) credit models amid CFPB scrutiny.