FTC Reverses Disparate Impact Enforcement Policy Under Equal Credit Opportunity Act and FTC Act Section 5
The Federal Trade Commission (FTC) has issued a policy statement abandoning its enforcement of disparate impact under the Equal Credit Opportunity Act (ECOA) and Section 5 of the FTC Act. This reversal is attributed to a reassessment of the FTC's statutory authority and an executive order from President Trump, which directed federal agencies to deprioritize disparate impact liability. This move aligns with similar policy rollbacks observed at the Consumer Financial Protection Bureau (CFPB) and other federal banking regulators. The change in policy means that the FTC will no longer pursue cases based solely on the statistical outcome of a practice disproportionately affecting protected groups, without requiring proof of discriminatory intent. This shift is significant for consumer-facing companies, particularly those in the financial services industry, as it alters the landscape of regulatory compliance and enforcement regarding fair lending practices. 
