Our CEO is pressing to establish a loan program targeted to and limited to the city police department. Would this program fall under the government exemption of fair lending sec 1002.3?? any other concerns??

Husker, from the definition, it appears that they are referring to credits to governments - not people.

" Credit to governments. The exception relates to credit extended to (not by) governmental entities. For example, credit extended to a local government is covered by this exception,. . ."