FTC ended disparate-impact credit-discrimination enforcement and retroactively softened three settlements

On August 7, 2026, the Federal Trade Commission voted 2-0 to adopt a policy statement declaring that it will not pursue claims based on "disparate-impact" or "unfair discrimination" theories under any statute it enforces, including credit-discrimination claims under the Equal Credit Opportunity Act. "Disparate-impact claims are nearly impossible to square with our colorblind Constitution," Chairman Andrew Ferguson said. "They impose liability for discrimination without any evidence that anyone intended to discriminate, which pushes businesses to make race-based decisions in order to avoid liability. The Commission never had authority to impose disparate-impact liability. Today, we announce that the Commission will never do so again." The policy statement ties the change directly to President Trump's executive order "Restoring Equality of Opportunity and Meritocracy," which set a policy of eliminating disparate-impact liability "in all contexts to the maximum degree possible." Going forward the FTC said it will continue to pursue disparate-treatment claims -- cases requiring evidence of intentional discrimination -- under the Equal Credit Opportunity Act.

As part of the new policy, the Commission reviewed past enforcement actions that had relied on statistical analyses of discriminatory effect and entered agreements modifying compliance obligations in three already-settled auto-dealer cases. Napleton Inc. had paid $10 million in 2022 to settle FTC and Illinois claims that it charged Black consumers more for financing -- at the time, the largest monetary judgment in an FTC auto-lending case. Passport Automotive Group and its president and vice president had paid more than $3.3 million the same year over claims of discriminatory financing and fees charged to Black and Latino consumers. An individual formerly associated with Coulter Motor Co. had separately settled for $2.6 million. All three settlements had drawn in part on statistical, outcome-based evidence rather than proof of intentional discrimination.

The vote reflects an FTC that has had only Republican commissioners since Trump removed Democratic commissioners Rebecca Slaughter and Alvaro Bedoya from the Commission in March 2025 -- a removal the Supreme Court upheld June 29, 2026 in Trump v. Slaughter, ruling that the FTC's for-cause removal protections violated the separation of powers. The FTC's action follows a similar rollback of disparate-impact enforcement standards already carried out at the Education Department and the Department of Transportation under the same executive order.