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WASHINGTON, Nov 11 (Reuters) - The U.S. Consumer Financial Protection Bureau plans to propose in the coming days narrowing a key part of civil-rights era fair-lending regulations as Republican President Donald Trump's administration overhauls protections and rules it says burden companies, according to two people with knowledge of the matter. The changes to the CFPB's rules implementing the 1974 Equal Credit Opportunity Act (ECOA) follow Trump's April executive order that federal regulators curtail regulations intended to prohibit policies and practices with unintentionally discriminatory impacts. Sign up here. Curbing so-called "disparate impact" liability, which is common in employment-related cases, removes a tool the government has used for decades to police racial and gender discrimination in housing, education, lending and other areas. Democrats in Congress have condemned the Trump administration's rollback of disparate impact enforcement, saying it ignores the history and reality of discrimination and will harm the public. The White House and CFPB did not immediately respond to requests for comment. The CFPB plans to propose changes that would de-emphasize "disparate impact" as an ECOA requirement, the people said. The people said the changes will also limit the permissible use of Special Purpose Credit Programs, which allow lenders to offer targeted credit assistance to specific classes of individuals without falling foul of ECOA. The CFPB may also make changes to its ECOA rules which bar a creditor from discouraging borrowers from applying for credit, such as through advertising or other marketing materials or statements, the people said. A court in June blocked the CFPB from undoing a settlement with a Chicago-area mortgage lender that officials in Trump's first administration had accused of "redlining" by discouraging would-be loan applicants. Writing and additional reporting by Michelle Price Our Standards: The Thomson Reuters Trust Principles., opens new tab Douglas Gillison covers financial regulation for Reuters, focusing on securities regulation, consumer finance and prudential oversight. He was previously a Congo-focused anticorruption investigator for a transparency organization and has covered war crimes trials and human rights. His reporting has sparked a foreign bribery probe of a publicly traded mining company.
