“Le roi est mort, vive le roi!” The peers of medieval France recited this proclamation to simultaneously acknowledge the death of a king and the continuation of the monarchy.
This seemingly contradictory quotation aptly describes my feeling as a fintech compliance practitioner for the current state of fair lending. Ostensibly, recent Federal actions suggest dramatic changes in fair lending enforcement priorities and the elimination of certain types of claims. In April, the White House issued an executive order directing Federal agencies to “eliminate the use of disparate-impact liability in all contexts to the maximum degree possible.”
The Department of Justice (DOJ) has sought early terminations of multiple redlining consent orders. And most recently, the Office of the Comptroller of the Currency (OCC) suspended all fair lending supervisory exams until February 2026.
These macro-level policy shifts contrast with the on-the-ground reality experienced by lender service providers. At Informed, we respond to dozens of compliance audits from client banks each year. Based on client expectations, fair lending feels very alive and well. And this year feels very much like last year.
For background, Informed helps lenders with a variety of critical services including loan processing and fraud prevention. Every year (and often more frequently) we go through dozens of exacting, detailed audits from our clients. Federal financial regulators require banks to closely oversee their service providers (see, for example, Interagency Guidance on Third-Party Relationships) under the principle that a lender can’t outsource its compliance obligations. These audits can have hundreds of questions and exhibits.
Regardless of what is going on at the Federal and State level, our customer audits are still carefully checking for fair lending risks. We are still asked if we test our models for fairness and bias and to provide evidence on our services’ impact on inclusion and fair lending. We are still asked to provide evidence of employee fair lending training. Our clients still expect us to perform every aspect of our services in compliance with applicable fair lending laws.
It’s too early to tell whether the constancy in our clients fair lending commitments is durable. Tilting or changing a bank’s compliance program takes time. Some of this is due to the size of the programs, and some of the inertia is intentional. Banks don’t want to change programs based on the priority of a single Presidential Administration, because parties move in and out of power with different priorities. This is especially important because the Dodd-Frank Act extended the legal statute of limitations for Equal Credit Opportunity Act violations to five years.
And regardless of federal action, companies need to contend with state fair lending enforcement and the suits by the private plaintiff’s bar.
Banks’ fair lending expectations of their service providers may change in the future. But, we are not seeing those changes yet.
Yes, fair lending is dead. Long live fair lending.
