The rules have not changed, but the climate has. After years of expanding oversight and data transparency, fair lending and CRA enforcement have now entered a period of uncertainty. New Executive Orders, shifting priorities, and state-level actions are reshaping how compliance officers interpret risk.
At RiskExec’s annual virtual event, RiskExec Connect 2025, Dr. Anurag Agarwal, President and Founder of RiskExec, and Dr. Marsha Courchane, Vice President and Practice Leader of Financial Economics at Charles River Associates, discussed how institutions can still “do the right thing” despite being in an environment in which enforcement tone changes, but the laws remain.
Their advice was simple and pragmatic: stay the course, follow the law, and let fairness remain a business strategy, not a political one.
Relive the conversation between Dr. Anurag Agarwal and Dr. Marsha Courchane from RiskExec Connect 2025 as they unpack fair lending, redlining, and Executive Orders shaping 2026.
Courchane noted that while recent Executive Orders have altered the tone of enforcement, they have not rewritten the Fair Housing Act or the Equal Credit Opportunity Act.
For example, Executive Order 14281, which rescinded disparate-impact guidance, does not reverse the Supreme Court’s Inclusive Communities ruling. Disparate-impact remains a valid legal test.
“Executive Orders set priorities. They do not erase law,” Dr. Courchane explained. “Disparate-impact is still part of the legal framework for discrimination under the Fair Housing Act.”
Institutions that treat Executive Orders as permission to pause fair lending oversight risk falling behind. Federal leadership may change, but statutory obligations remain constant.
Both speakers pointed to the rise of state agencies filling the enforcement gap left by a quieter federal posture.
Dr. Courchane highlighted that states such as California, Illinois, Massachusetts, and New York are already expanding their fair lending and CRA authority. Many former CFPB and DOJ attorneys now work at the state level instead, carrying their expertise into new roles.
This creates a high-pressure environment for financial institutions due to now having:
Dr. Agarwal advised institutions to treat this as a reason to strengthen governance rather than to fragment programs. “You cannot prepare for fifty separate examinations. The solution is a single, defensible program built on consistent data and policy,” he said.
Fair lending expectations may appear to soften, but inaction or cancellations of existing programs creates exposure. Dr. Courchane warned that the enforcement pendulum swings back quickly, and regulators frequently perform five-year lookbacks.
“If you do nothing for five years while others keep up their programs, peer data will expose the gap. You will be the outlier,” she said.
Dr. Agarwal echoed Dr. Courchane’s sentiment when he spoke about how maintaining fair lending analysis, complaint monitoring, and community credit reviews is not optional. It is a safeguard against reputational and legal risk.
Even absent federal enforcement, fair lending remains visible to investors, community advocates, and the public. Transparency through HMDA, CRA, and small-business data ensures continued accountability.
Both speakers reframed compliance as an opportunity, versus an annual obligation.
Community credit needs assessments, peer comparisons, and branch distribution analyses can identify growth markets as effectively as they identify risk.
When a bank discovers underperformance in majority-minority census tracts, that shortfall can become a targeted growth plan that encourages banks to:
Dr. Agarwal emphasized that technology plays a central role in this: “The same data you use for compliance monitoring can help you find where to grow in the future.”
The discussion also turned to Section 1071 of the Dodd-Frank Act, which requires small-business lending data collection. Although implementation deadlines have been pushed back, both experts agreed that compliance planning should continue.
Dr. Courchane observed that the provision remains law, and that banks should continue to prepare.
Institutions can use existing HMDA processes as a foundation to:
Fair lending and CRA performance are no longer only regulatory measures. They reflect an institution’s reach and reputation. When banks use compliance data to drive equitable access and community development, they strengthen both regulatory defense and overall brand equity and trust.
Dr. Agarwal summarized it well when he stated, “Fairness is not just compliance. It is good business. The data that protects you can also grow you.”
Institutions that keep analyzing, documenting, and investing in communities will be well positioned ahead of the next enforcement cycle.
No. Executive Orders affect enforcement priorities, not the underlying Fair Housing Act or ECOA statutes. Disparate-impact remains a valid legal test.
California, Illinois, Massachusetts, and New York are among the most active, with expanded CRA-style frameworks and dedicated fair lending divisions.
Yes, as long as they are a financial institution that originated 1,000 or more covered small business credit transactions in each of the two preceding calendar years. The rule has been delayed but not repealed. Early preparation reduces future implementation costs and supports better small-business outreach.
