The American Bankers Association today launched a new webpage providing information on special purpose credit programs (SPCPs) and highlighting the role they can play in meeting the credit needs of economically disadvantaged small businesses. In support of the Office of the Comptroller of the Currency’s Project REACh, ABA is making this online resource available for banks and other stakeholders to increase awareness of these programs and share technical insights to support successful special purpose credit programs specifically designed for small businesses.
SPCPs have been permitted by federal financial regulators for more than 40 years under the Equal Credit Opportunity Act (ECOA) and are available for all types of credit products. These programs are allowed to favorably consider credit applicants based on factors such as race, ethnicity or religion. SPCPs allow revised pricing or credit underwriting requirements in order to extend credit to a class of persons who customarily might be less likely to receive credit, or who would receive it on less favorable terms.
“Special purpose credit programs are an important and often overlooked tool for financial institutions to expand access to credit for underserved communities,” said ABA President and CEO Rob Nichols. “We hope that calling attention to these critically important programs and providing banks with relevant information will encourage more institutions to consider launching an SPCP.”
The webpage outlines how SPCPs work and features a checklist for banks to follow when developing a plan to offer these programs. It also showcases a case study of a bank that successfully launched an SPCP. To learn more about SPCPs and best practices for offering them, visit aba.com/SPCP.