Removal of Disparate Impact

Dear Boards of Directors and Chief Executive Officers:

On April 23, 2025, the President issued Executive Order (EO) 14281, Restoring Equality of Opportunity and Meritocracy. EO 14281 states that it is “the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible.”

Consistent with EO 14281, the NCUA has decided to remove references to disparate impact liability from its “Fair Lending Guide” and has commenced removing references in other issuances. Concurrently, the NCUA has instructed its examiners that they will no longer request, review, or conclude on or follow-up on:

• matters related to a credit union’s disparate impact risk,
• internal disparate-impact risk analysis, or
• disparate-impact risk assessment processes or procedures.

The NCUA’s supervisory processes continue to include regularly conducting fair lending risk assessments, analyzing Home Mortgage Disclosure Act data for possible evidence of disparate treatment, conducting risk-based fair lending examinations, and taking appropriate action if evidence of disparate treatment is found.

The NCUA expects credit unions to provide fair access to financial services, treat members fairly, and comply with all applicable laws and regulations.

Please contact your NCUA examiner or the NCUA’s Office of Consumer Financial Protection if you have any questions about disparate impact.