Special Purpose Credit Program Resources
Special Purpose Credit Programs (SPCPs), as detailed in the Equal Credit Opportunity Act and Regulation B, empower lenders to develop programs specifically designed to meet the unique credit needs of historically underserved groups, such as people of color and women, without being deemed discriminatory. These programs aim to promote access to credit for disadvantaged groups. Despite their proven profitability and authorization nearly 50 years ago, SPCPs remain significantly underutilized.
At Beneficial State Foundation, we’ve compiled a list of resources and created a sample SPCP to inspire lenders to develop their own programs, addressing the systemic barriers to equal financing that many face in this country.
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Sample Special Purpose Credit Program
Meet Cedar Hills Community Bank: A fictitious lender that has developed an SPCP to increase loan approvals for Black, Latino, and Indigenous small business owners in Oregon. This example was crafted by first identifying lending gaps, designing targeted interventions, creating an evaluation plan, and incorporating feedback from regulators. Cedar Hills is sharing their first draft with comments about changes that informed the final version with the goal of providing comprehensive insights into the development process.
Underwriting for Racial Justice Lender Guide
This guide outlines the Underwriting for Racial Justice Program, offering directions for lenders on implementing similar initiatives. It includes learnings, suggestions, checklists, and additional resources. Appendix B (page 33) provides guidance on the regulatory aspects of SPCPs, while Appendix C (pages 34-39) offers a template to help you develop your own SPCP.
Let's connect!
Do you have an SPCP that you’d like to share? Are you interested in learning more about developing such a program? We’d love to hear from you! Contact us via email to ask questions or to be added to the list for our next Underwriting for Racial Justice (URJ) working group meeting, where we will discuss racial justice in the finance industry.