|
WASHINGTON, D.C. – Today, America First Legal (AFL) filed a formal petition for rulemaking urging the Consumer Financial Protection Bureau (CFPB) to rescind Regulation C, a federal rule that forces mortgage applicants to disclose their race, ethnicity, and sex, and pressures lenders to make approval decisions based on that information.
Originally enacted in the 1970s to address historic housing discrimination, Regulation C has evolved into a mechanism for disparate-impact enforcement and race-conscious investment allocation. The rule requires mortgage applicants to disclose sensitive demographic information, which government agencies and private actors use to scrutinize lending outcomes for racial and sex-based disparities. Regulation C effectively functions as a surveillance and enforcement tool that incentivizes discriminatory decision-making, rather than neutral, credit-based evaluation.
AFL’s petition argues that Regulation C exposes Americans to race- and sex-based discrimination, pressures lenders to engage in demographic balancing rather than merit-based lending, and conflicts with both federal civil rights law and the U.S. Constitution’s guarantee of equal protection.
In light of recent U.S. Supreme Court precedent rejecting race-based decision-making and President Trump’s Executive Order 14281, “Restoring Equality of Opportunity and Meritocracy,” AFL’s petition asserts that the continued collection of this data has no lawful or compelling justification.
AFL’s petition further explains that Regulation C is not passive data collection. By mandating disclosure of race and sex and encouraging its use in government and private investment decisions, the rule invites unequal treatment of borrowers and exposes lenders to legal risk — all while undermining free enterprise and fair access to credit.
“The federal government has no business forcing Americans to disclose their race or sex as a condition of applying for a mortgage,” said Gene Hamilton, President of America First Legal. “Regulation C pressures lenders to sort borrowers by immutable characteristics and invites discrimination under the guise of ‘equity.’ That is incompatible with civil rights law, the Constitution, and the principle that lending decisions should be based on merit and creditworthiness — not race or sex.”
AFL’s petition urges CFPB to initiate formal rulemaking to rescind Regulation C’s demographic data requirements and repeal Appendix B in full, restoring a neutral, colorblind framework for mortgage lending consistent with federal law and executive policy.
AFL remains committed to defending equal protection under the law and ensuring that government agencies do not weaponize data collection to promote unlawful discrimination.
Read the full petition for rulemaking here.
Read more about AFL’s fight to restore equality here.
|
