Special Purpose Credit Program: what is it?

A Special Purpose Credit Program (SPCP) provides opportunities for financing and credit to limited, defined underserved communities.

The Consumer Financial Protection Bureau, in December 2020, issued an advisory opinion that credit programs could be created to serve underrepresented communities where there is a social need met through these programs.  The advisory opinion said that SPCPs did not violate the Equal Credit Opportunity Act when they include research and data that shows through analysis that an SPCP is needed to benefit a specific group to accomplish a social need.

An example of a SPCP would be a mortgage program created to address disparities in homeownership by a specific group of people or in a certain area.

The SPCP must provide details describing a group or class of persons intended to be served; procedures and standards for applying for and approving credit; a time period or amount of credit available through the SPCP; whether the program will be re-evaluated;  and analysis showing the need for the program. For-profit organizations, nonprofits and governmental organizations can create SPCPs.

Interested to learn more? Ask a loan officer about SPCPs or down payment assistance programs, or feel free to reach out to spaar@spaar.com.