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6500 - Consumer Protection
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PART 202—EQUAL CREDIT OPPORTUNITY (REGULATION B)
Sec.
202.1
Authority, scope and purpose.
202.2
Definitions.
202.3
Limited exceptions for certain classes of transactions.
202.4
General rules.
202.5
Rules concerning requests for information.
202.6
Rules concerning evaluation of applications.
202.7
Rules concerning extensions of credit.
202.8
Special purpose credit programs.
202.9
Notifications.
202.10
Furnishing of credit information.
202.11
Relation to state law.
202.12
Record retention.
202.13
Information for monitoring purposes.
202.14
Rules on providing appraisal reports.
202.15
Incentives for self-testing and self-correction.
202.16
Requirements for electronic communication.
202.17
Enforcement, penalties and liabilities.
Appendix A to Part
202—Federal Enforcement Agencies
Appendix B to Part
202—Model Application Forms
Appendix C to Part
202—Sample Notification Forms
Appendix D to Part
202—Issuance of Staff Interpretations
Supplement I to Part
202—Official Staff Interpretations
AUTHORITY: 15 U.S.C.
1691--1691f.
SOURCE: The provisions of this Part 202 appear at 68 Fed. Reg.
13161, March 18, 2003, effective April 15, 2003, mandatory compliance
date, April 15, 2004, except as otherwise noted.
§ 202.1 Authority, scope and purpose.
(a) Authority and scope. This regulation is issued by
the Board of Governors of the Federal Reserve System pursuant to title
VII (Equal Credit Opportunity Act) of the Consumer Credit Protection
Act, as amended (15 U.S.C. 1601 et seq.). Except as
otherwise provided herein, this regulation applies to all persons who
are creditors, as defined in § 202.2(l).
Information collection requirements contained in this regulation have
been approved by the Office of Management and Budget under the
provisions of 44 U.S.C. 3501 et seq. and have been assigned
OMB No. 7100-0201.
(b) Purpose. The purpose of this regulation is to
promote the availability of credit to all creditworthy applicants
without regard to race, color, religion, national origin, sex, marital
status, or age (provided the applicant has the capacity to contract);
to the fact that all or part of the applicant's income derives from a
public assistance program; or to the fact that the applicant has in
good faith exercised any right under the Consumer Credit Protection
Act. The regulation prohibits creditor practices that discriminate on
the basis of any of these factors. The regulation also requires
creditors to notify applicants of action taken on their applications;
to report credit history in the names of both spouses on an account; to
retain records of credit applications; and to collect information about
the applicant's race and other personal characteristics in applications
for certain dwelling-related loans; and to provide applicants with
copies of appraisal reports used in connection with credit
transactions.
[Codified to 12 C.F.R. § 202.1]
§ 202.2 Definitions.
For the purposes of this regulation, unless the context indicates
otherwise, the following definitions apply.
{{6-30-05 p.7210}}
(a) Account means an extension of credit. When employed
in relation to an account, the word use refers only to
open-end credit.
(b) Act means the Equal Credit Opportunity Act (title
VII of the Consumer Credit Protection Act).
(c) Adverse action--(1) The term means:
(i) A refusal to grant credit in substantially the amount or on
substantially the terms requested in an application unless the creditor
makes a counteroffer (to grant credit in a different amount or on other
terms) and the applicant uses or expressly accepts the credit offered;
(ii) A termination of an account or an unfavorable change in the
terms of an account that does not affect all or substantially all of a
class of the creditor's accounts; or
(iii) A refusal to increase the amount of credit available to an
applicant who has made an application for an increase.
(2) The term does not include:
(i) A change in the terms of an account expressly agreed to by an
applicant.
(ii) Any action or forbearance relating to an account taken in
connection with inactivity, default, or delinquency as to that account;
(iii) A refusal or failure to authorize an account transaction at
point of sale or loan, except when the refusal is a termination or an
unfavorable change in the terms of an account that does not affect all
or substantially all of a class of the creditor's accounts, or when the
refusal is a denial of an application for an increase in the amount of
credit available under the account;
(iv) A refusal to extend credit because applicable law prohibits
the creditor from extending the credit requested; or
(v) A refusal to extend credit because the creditor does not
offer the type of credit or credit plan requested.
(3) An action that falls within the definition of both paragraphs
(c)(1) and (c)(2) of this section is governed by paragraph (c)(2) of
this section.
(d) Age refers only to the age of natural persons and
means the number of fully elapsed years from the date of an applicant's
birth.
(e) Applicant means any person who requests or who has
received an extension of credit from a creditor, and includes any
person who is or may become contractually liable regarding an extension
of credit. For purposes of § 202.7(d), the term includes guarantors,
sureties, endorsers, and similar parties.
(f) Application means an oral or written request for an
extension of credit that is made in accordance with procedures used by
a creditor for the type of credit requested. The term application does
not include the use of an account or line of credit to obtain an amount
of credit that is within a previously established credit limit. A
completed application means an application in connection
with which a creditor has received all the information that the
creditor regularly obtains and considers in evaluating applications for
the amount and type of credit requested (including, but not limited to,
credit reports, any additional information requested from the
applicant, and any approvals or reports by governmental agencies or
other persons that are necessary to guarantee, insure, or provide
security for the credit or collateral). The creditor shall exercise
reasonable diligence in obtaining such information.
(g) Business credit refers to extensions of credit
primarily for business or commercial (including agricultural) purposes,
but excluding extensions of credit of the types described in § 202.3
(a)--(d).
(h) Consumer credit means credit extended to a natural
person primarily for personal, family, or household purposes.
(i) Contractually liable means expressly obligated to
repay all debts arising on an account by reason of an agreement to that
effect.
(j) Credit means the right granted by a creditor to an
applicant to defer payment of a debt, incur debt and defer its payment,
or purchase property or services and defer payment therefor.
(k) Credit card means any card, plate, coupon book, or
other single credit device that may be used from time to time to obtain
money, property, or services on credit.
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(l) Creditor means a person who, in
the ordinary course of business, regularly participates in a credit
decision, including setting the terms of the credit. The term creditor
includes a creditor's assignee, transferee, or subrogee who so
participates. For purposes of § 202.4 (a) and (b), the term creditor
also includes a person who, in the ordinary course of business,
regularly refers applicants or prospective applicants to creditors, or
selects or offers to select creditors to whom requests for credit may
be made. A person is not a creditor regarding any violation of the Act
or this regulation committed by another creditor unless the person knew
or had reasonable notice of the act, policy, or practice that
constituted the violation before becoming involved in the credit
transaction. The term does not include a person whose only
participation in a credit transaction involves honoring a credit card.
(m) Credit transaction means every aspect of an
applicant's dealings with a creditor regarding an application for
credit or an existing extension of credit (including, but not limited
to, information requirements; investigation procedures; standards of
creditworthiness; terms of credit; furnishing of credit information;
revocation, alteration, or termination of credit; and collection
procedures).
(n) Discriminate against an applicant means to treat an
applicant less favorably than other applicants.
(o) Elderly means age 62 or older.
(p) Empirically derived and other credit scoring
systems--(1) A credit scoring system is a system that
evaluates an applicant's creditworthiness mechanically, based on key
attributes of the applicant and aspects of the transaction, and that
determines, alone or in conjunction with an evaluation of additional
information about the applicant, whether an applicant is deemed
creditworthy. To qualify as an empirically derived, demonstrably
and statistically sound, credit scoring system, the system must
be:
(i) Based on data that are derived from an empirical comparison
of sample groups or the population of creditworthy and noncreditworthy
applicants who applied for credit within a reasonable preceding period
of time;
(ii) Developed for the purpose of evaluating the creditworthiness
of applicants with respect to the legitimate business interests of the
creditor utilizing the system (including, but not limited to,
minimizing bad debt losses and operating expenses in accordance with
the creditor's business judgment);
(iii) Developed and validated using accepted statistical
principles and methodology; and
(iv) Periodically revalidated by the use of appropriate
statistical principles and methodology and adjusted as necessary to
maintain predictive ability.
(2) A creditor may use an empirically derived, demonstrably and
statistically sound, credit scoring system obtained from another person
or may obtain credit experience from which to develop such a system.
Any such system must satisfy the criteria set forth in paragraph
(p)(1)(i) through (iv) of this section; if the creditor is unable
during the development process to validate the system based on its own
credit experience in accordance with paragraph (p)(1) of this section,
the system must be validated when sufficient credit experience becomes
available. A system that fails this validity test is no longer an
empirically derived, demonstrably and statistically sound, credit
scoring system for that creditor.
(q) Extend credit and extension of credit
mean the granting of credit in any form (including, but not
limited to, credit granted in addition to any existing credit or credit
limit; credit granted pursuant to an open-end credit plan; the
refinancing or other renewal of credit, including the issuance of a new
credit card in place of an expiring credit card or in substitution for
an existing credit card; the consolidation of two or more obligations;
or the continuance of existing credit without any special effort to
collect at or after maturity).
(r) Good faith means honesty in fact in the conduct or
transaction.
{{4-30-03 p.7212}}
(s) Inadvertent error means a mechanical, electronic, or
clerical error that a creditor demonstrates was not intentional and
occurred notwithstanding the maintenance of procedures reasonably
adapted to avoid such errors.
(t) Judgmental system of evaluating applicants means any
system for evaluating the creditworthiness of an applicant other than
an empirically derived, demonstrably and statistically sound, credit
scoring system.
(u) Marital status means the state of being unmarried,
married, or separated, as defined by applicable state law. The term
"unmarried" includes persons who are single, divorced, or
widowed.
(v) Negative factor or value, in relation to the age of
elderly applicants, means utilizing a factor, value, or weight that is
less favorable regarding elderly applicants than the creditor's
experience warrants or is less favorable than the factor, value, or
weight assigned to the class of applicants that are not classified as
elderly and are most favored by a creditor on the basis of age.
(w) Open-end credit means credit extended under a plan
in which a creditor may permit an applicant to make purchases or obtain
loans from time to time directly from the creditor or indirectly by use
of a credit card, check, or other device.
(x) Person means a natural person, corporation,
government or governmental subdivision or agency, trust, estate,
partnership, cooperative, or association.
(y) Pertinent element of creditworthiness, in relation
to a judgmental system of evaluating applicants, means any information
about applicants that a creditor obtains and considers and that has a
demonstrable relationship to a determination of creditworthiness.
(z) Prohibited basis means race, color, religion,
national origin, sex, marital status, or age (provided that the
applicant has the capacity to enter into a binding contract); the fact
that all or part of the applicant's income derives from any public
assistance program; or the fact that the applicant has in good faith
exercised any right under the Consumer Credit Protection Act or any
state law upon which an exemption has been granted by the Board.
(aa) State means any state, the District of Columbia,
the Commonwealth of Puerto Rico, or any territory or possession of the
United States.
[Codified to 12 C.F.R. § 202.2]
§ 202.3 Limited exceptions for certain classes of
transactions.
(a) Public utilities credit. --(1)
Definition. Public utilities credit refers to extensions of
credit that involve public utility services provided through pipe,
wire, or other connected facilities, or radio or similar transmission
(including extensions of such facilities), if the charges for service,
delayed payment, and any discount for prompt payment are filed with or
regulated by a government unit.
(2) Exceptions. The following provisions of this
regulation do not apply to public utilities credit:
(i) Section 202.5(d)(1) concerning information about marital
status; and
(ii) Section 202.12(b) relating to record retention.
(b) Securities credit. --(1) Definition.
Securities credit refers to extensions of credit subject to
regulation under section 7 of the Securities Exchange Act of 1934 or
extensions of credit by a broker or dealer subject to regulation as a
broker or dealer under the Securities Exchange Act of 1934.
(2) Exceptions. The following provisions of this
regulation do not apply to securities credit:
(i) Section 202.5(b) concerning information about the sex of an
applicant;
(ii) Section 202.5(c) concerning information about a spouse or
former spouse;
(iii) Section 202.5(d)(1) concerning information about marital
status;
(iv) Section 202.7(b) relating to designation of name to the
extent necessary to comply with rules regarding an account in which a
broker or dealer has an interest, or rules regarding the aggregation of
accounts of spouses to determine controlling interests, beneficial
interests, beneficial ownership, or purchase limitations and
restrictions;
{{12-31-07 p.7213}}
(v) Section 202.7(c) relating to action concerning open-end
accounts, to the extent the action taken is on the basis of a change of
name or marital status;
(vi) Section 202.7(d) relating to the signature of a spouse or
other person;
(vii) Section 202.10 relating to furnishing of credit
information; and
(viii) Section 202.12(b) relating to record retention.
(c) Incidental credit--(1) Definition.
Incidental credit refers to extensions of consumer credit other
than the types described in paragraphs (a) and (b) of this section:
(i) That are not made pursuant to the terms of a credit card
account;
(ii) That are not subject to a finance charge (as defined in
Regulation Z, 12 CFR 226.4);
and
(iii) That are not payable by agreement in more than four
installments.
(2) Exceptions. The following provisions of this
regulation do not apply to incidental credit:
(i) Section 202.5(b) concerning information about the sex of an
applicant, but only to the extent necessary for medical records or
similar purposes;
(ii) Section 202.5(c) concerning information about a spouse or
former spouse;
(iii) Section 202.5(d)(1) concerning information about marital
status;
(iv) Section 202.5(d)(2) concerning information about income
derived from alimony, child support, or separate maintenance payments;
(v) Section 202.7(d) relating to the signature of a spouse or
other person;
(vi) Section 202.9 relating to notifications;
(vii) Section 202.10 relating to furnishing of credit
information; and
(viii) Section 202.12(b) relating to record retention.
(d) Government credit--(1) Definition.
Government credit refers to extensions of credit made to
governments or governmental subdivisions, agencies, or
instrumentalities.
(2) Applicability of regulation. Except for section
202.4(a), the general rule against discrimination on a prohibited
basis, the requirements of this regulation do not apply to government
credit.
[Codified to 12 C.F.R. § 202.3]
§ 202.4 General rules.
(a) Discrimination. A creditor shall not discriminate
against an applicant on a prohibited basis regarding any aspect of a
credit transaction.
(b) Discouragement. A creditor shall not make any oral
or written statement, in advertising or otherwise, to applicants or
prospective applicants that would discourage on a prohibited basis a
reasonable person from making or pursuing an application.
(c) Written applications. A creditor shall take written
applications for the dwelling-related types of credit covered by
§ 202.13(a).
(d) Form of disclosures--(1) General rule. A
creditor that provides in writing any disclosures or information
required by this regulation must provide the disclosures in a clear and
conspicuous manner and, except for the disclosures required by
§§ 202.5 and 202.13, in a form the applicant may retain.
(2) Disclosures in electronic form. The disclosures
required by this part that are required to be given in writing may be
provided to the applicant in electronic form, subject to compliance
with the consumer consent and other applicable provisions of the
Electronic Signatures in Global and National Commerce Act (E-Sign Act)
(15 U.S.C. 7001 et seq.). Where the disclosures under
§§ 202.5(b)(1), 202.5(b)(2), 202.5(d)(1), 202.5(d)(2), 202.13, and
202.14(a)(2)(i) accompany an application accessed by the applicant in
electronic form, these disclosures may be provided to the applicant in
electronic form on or with the application form, without regard to the
consumer consent or other provisions of the E-Sign Act.
(e) Foreign-language disclosures. Disclosures may be
made in languages other than English, provided they are available in
English upon request.
[Codified to 12 C.F.R. § 202.4]
[Section 202.4 amended at 72 Fed. Reg. 63451, November 9,
2007, effective December 10, 2007, the mandatory compliance date is
October 1, 2008]
{{12-31-07 p.7214}}
§ 202.5 Rules concerning requests for information.
(a) General rules--(1) Requests for information.
Except as provided in paragraphs (b) through (d) of this section,
a creditor may request any information in connection with a credit
transaction. 1
(2) Required collection of information.
Notwithstanding paragraphs (b) through (d) of this section, a
creditor shall request information for monitoring purposes as required
by § 202.13 for credit secured by the applicant's dwelling. In
addition, a creditor may obtain information required by a regulation,
order, or agreement issued by, or entered into with, a court or an
enforcement agency (including the Attorney General of the United States
or a similar state official) to monitor or enforce compliance with the
Act, this regulation, or other federal or state statutes or
regulations.
(3) Special-purpose credit. A creditor may obtain
information that is otherwise restricted to determine eligibility for a
special purpose credit program, as provided in § 202.8(b), (c), and
(d).
(b) Limitation on information about race, color, religion,
national origin, or sex. A creditor shall not inquire about the
race, color, religion, national origin, or sex of an applicant or any
other person in connection with a credit transaction, except as
provided in paragraphs (b)(1) and (b)(2) of this section.
(1) Self-test. A creditor may inquire about the race,
color, religion, national origin, or sex of an applicant or any other
person in connection with a credit transaction for the purpose of
conducting a self-test that meets the requirements of § 202.15. A
creditor that makes such an inquiry shall disclose orally or in
writing, at the time the information is requested, that:
(i) The applicant will not be required to provide the
information;
(ii) The creditor is requesting the information to monitor its
compliance with the federal Equal Credit Opportunity Act;
(iii) Federal law prohibits the creditor from discriminating on
the basis of this information, or on the basis of an applicant's
decision not to furnish the information; and
(iv) If applicable, certain information will be collected based
on visual observation or surname if not provided by the applicant or
other person.
(2) Sex. An applicant may be requested to designate a
title on an application form (such as Ms., Miss, Mr., or Mrs.) if the
form discloses that the designation of a title is optional. An
application form shall otherwise use only terms that are neutral as to
sex.
(c) Information about a spouse or former spouse--(1)
General rule. Except as permitted in this paragraph, a
creditor may not request any information concerning the spouse or
former spouse of an applicant.
(2) Permissible inquiries. A creditor may request any
information concerning an applicant's spouse (or former spouse under
paragraph (c)(2)(v) of this section) that may be requested about the
applicant if:
(i) The spouse will be permitted to use the account;
(ii) The spouse will be contractually liable on the account;
(iii) The applicant is relying on the spouse's income as a basis
for repayment of the credit requested;
(iv) The applicant resides in a community property state or is
relying on property located in such a state as a basis for repayment of
the credit requested; or
(v) The applicant is relying on alimony, child support, or
separate maintenance payments from a spouse or former spouse as a basis
for repayment of the credit requested.
(3) Other accounts of the applicant. A creditor may
request that an applicant list any account on which the applicant is
contractually liable and to provide the name and address of the person
in whose name the account is held. A creditor may also ask an applicant
to list the names in which the applicant has previously received
credit.
(d) Other limitations on information requests--(1)
Marital status. If an applicant applies for individual
unsecured credit, a creditor shall not inquire about the applicant's
marital status unless the applicant resides in a community property
state or is relying on property located in such a state as a basis for
repayment of the credit requested. If an application is
{{12-31-07 p.7214.01}}for other than individual
unsecured credit, a creditor may inquire about the applicant's marital
status, but shall use only the terms married,
unmarried, and separated. A creditor may explain
that the category unmarried includes single, divorced, and
widowed persons.
(2) Disclosure about income from alimony, child support, or
separate maintenance. A creditor shall not inquire whether income
stated in an application is derived from alimony, child support, or
separate maintenance payments unless the creditor discloses to
the
{{4-30-03 p.7215}}applicant that such income need not
be revealed if the applicant does not want the creditor to consider it
in determining the applicant's creditworthiness.
(3) Childbearing, childrearing. A creditor shall not
inquire about birth control practices, intentions concerning the
bearing or rearing of children, or capability to bear children. A
creditor may inquire about the number and ages of an applicant's
dependents or about dependent-related financial obligations or
expenditures, provided such information is requested without regard to
sex, marital status, or any other prohibited basis.(e) Permanent residency and immigration status. A
creditor may inquire about the permanent residency and immigration
status of an applicant or any other person in connection with a credit
transaction.
[Codified to 12 C.F.R. § 202.5]
§ 202.6 Rules concerning evaluation of applications.
(a) General rule concerning use of information. Except
as otherwise provided in the Act and this regulation, a creditor may
consider any information obtained, so long as the information is not
used to discriminate against an applicant on a prohibited
basis. 2
(b) Specific rules concerning use of information. (1)
Except as provided in the Act and this regulation, a creditor shall not
take a prohibited basis into account in any system of evaluating the
creditworthiness of applicants.
(2) Age, receipt of public assistance. (i) Except as
permitted in this paragraph, a creditor shall not take into account an
applicant's age (provided that the applicant has the capacity to enter
into a binding contract) or whether an applicant's income derives from
any public assistance program.
(ii) In an empirically derived, demonstrably and statistically
sound, credit scoring system, a creditor may use an applicant's age as
a predictive variable, provided that the age of an elderly applicant is
not assigned a negative factor or value.
(iii) In a judgmental system of evaluating creditworthiness, a
creditor may consider an applicant's age or whether an applicant's
income derives from any public assistance program only for the purpose
of determining a pertinent element of creditworthiness.
(iv) In any system of evaluating creditworthiness, a creditor may
consider the age of an elderly applicant when such age is used to favor
the elderly applicant in extending credit.
(3) Childbearing, childrearing. In evaluating
creditworthiness, a creditor shall not make assumptions or use
aggregate statistics relating to the likelihood that any category of
persons will bear or rear children or will, for that reason, receive
diminished or interrupted income in the future.
(4) Telephone listing. A creditor shall not take into
account whether there is a telephone listing in the name of an
applicant for consumer credit, but may take into account whether there
is a telephone in the applicant's residence.
(5) Income. A creditor shall not discount or exclude
from consideration the income of an applicant or the spouse of an
applicant because of a prohibited basis or because the income is
derived from part-time employment or is an annuity, pension, or other
retirement benefit; a creditor may consider the amount and probable
continuance of any income in evaluating an applicant's
creditworthiness. When an applicant relies on alimony, child support,
or separate maintenance payments in applying for credit, the creditor
shall consider such payments as income to the extent that they are
likely to be consistently made.
(6) Credit history. To the extent that a creditor
considers credit history in evaluating the creditworthiness of
similarly qualified applicants for a similar type and amount of credit,
in evaluating an applicant's creditworthiness a creditor shall
consider:
(i) The credit history, when available, of accounts designated as
accounts that the applicant and the applicant's spouse are permitted to
use or for which both are contractually liable;
{{4-30-03 p.7216}}
(ii) On the applicant's request, any information the applicant
may present that tends to indicate that the credit history being
considered by the creditor does not accurately reflect the applicant's
creditworthiness; and
(iii) On the applicant's request, the credit history, when
available, of any account reported in the name of the applicant's
spouse or former spouse that the applicant can demonstrate accurately
reflects the applicant's creditworthiness.
(7) Immigration status. A creditor may consider the
applicant's immigration status or status as a permanent resident of the
United States, and any additional information that may be necessary to
ascertain the creditor's rights and remedies regarding repayment.
(8) Marital status. Except as otherwise permitted or
required by law, a creditor shall evaluate married and unmarried
applicants by the same standards; and in evaluating joint applicants, a
creditor shall not treat applicants differently based on the existence,
absence, or likelihood of a marital relationship between the parties.
(9) Race, color, religion, national origin, sex.
Except as otherwise permitted or required by law, a creditor shall
not consider race, color, religion, national origin, or sex (or an
applicant's or other person's decision not to provide the
information) in any aspect of a credit transaction.
(c) State property laws. A creditor's consideration or
application of state property laws directly or indirectly affecting
creditworthiness does not constitute unlawful discrimination for the
purposes of the Act or this regulation.
[Codified to 12 C.F.R. § 202.6]
§ 202.7 Rules concerning extensions of credit.
(a) Individual accounts. A creditor shall not refuse to
grant an individual account to a creditworthy applicant on the basis of
sex, marital status, or any other prohibited basis.
(b) Designation of name. A creditor shall not refuse to
allow an applicant to open or maintain an account in a birth-given
first name and a surname that is the applicant's birth-given surname,
the spouse's surname, or a combined surname.
(c) Action concerning existing open-end accounts.
--(1) Limitations. In the absence of evidence of the
applicant's inability or unwillingness to repay, a creditor shall not
take any of the following actions regarding an applicant who is
contractually liable on an existing open-end account on the basis of
the applicant's reaching a certain age or retiring or on the basis of a
change in the applicant's name or marital status:
(i) Require a reapplication, except as provided in paragraph
(c)(2) of this section;
(ii) Change the terms of the account; or
(iii) Terminate the account.
(2) Requiring reapplication. A creditor may require a
reapplication for an open-end account on the basis of a change in the
marital status of an applicant who is contractually liable if the
credit granted was based in whole or in part on income of the
applicant's spouse and if information available to the creditor
indicates that the applicant's income may not support the amount of
credit currently available.
(d) Signature of spouse or other person--(1) Rule
for qualified applicant. Except as provided in this paragraph, a
creditor shall not require the signature of an applicant's spouse or
other person, other than a joint applicant, on any credit instrument if
the applicant qualifies under the creditor's standards of
creditworthiness for the amount and terms of the credit requested. A
creditor shall not deem the submission of a joint financial statement
or other evidence of jointly held assets as an application for joint
credit.
(2) Unsecured credit. If an applicant requests
unsecured credit and relies in part upon property that the applicant
owns jointly with another person to satisfy the creditor's standards of
creditworthiness, the creditor may require the signature of the other
person only on the instrument(s) necessary, or reasonably believed by
the creditor to be necessary, under the law of the state in which the
property is located, to enable the creditor to reach the property being
relied upon in the event of the death or default of the applicant.
(3) Unsecured credit--community property states. If a
married applicant requests unsecured credit and resides in a community
property state, or if the applicant is relying on property located in
such a state, a creditor may require the signature of the spouse on any
instrument necessary, or reasonably believed by the creditor to be
necessary,
{{12-31-07 p.7217}}under applicable state law to make
the community property available to satisfy the debt in the event of
default if:
(i) Applicable state law denies the applicant power to manage or
control sufficient community property to qualify for the credit
requested under the creditor's standards of creditworthiness; and
(ii) The applicant does not have sufficient separate property to
qualify for the credit requested without regard to community property.
(4) Secured credit. If an applicant requests secured
credit, a creditor may require the signature of the applicant's spouse
or other person on any instrument necessary, or reasonably believed by
the creditor to be necessary, under applicable state law to make the
property being offered as security available to satisfy the debt in the
event of default, for example, an instrument to create a valid lien,
pass clear title, waive inchoate rights or assign earnings.
(5) Additional parties. If, under a creditor's
standards of creditworthiness, the personal liability of an additional
party is necessary to support the credit requested, a creditor may
request a cosigner, guarantor, endorser, or similar party. The
applicant's spouse may serve as an additional party, but the creditor
shall not require that the spouse be the additional party.
(6) Rights of additional parties. A creditor shall
not impose requirements upon an additional party that the creditor is
prohibited from imposing upon an applicant under this section.
(e) Insurance. A creditor shall not refuse to extend
credit and shall not terminate an account because credit life, health,
accident, disability, or other credit-related insurance is not
available on the basis of the applicant's age.
[Codified to 12 C.F.R. § 202.7]
§ 202.8 Special purpose credit programs.
(a) Standards for programs. Subject to the provisions
of paragraph (b) of this section, the Act and this regulation permit a
creditor to extend special purpose credit to applicants who meet
eligibility requirements under the following types of credit programs:
(1) Any credit assistance program expressly authorized by federal
or state law for the benefit of an economically disadvantaged class of
persons;
(2) Any credit assistance program offered by a not-for-profit
organization, as defined under section 501(c) of the Internal Revenue
Code of 1954, as amended, for the benefit of its members or for the
benefit of an economically disadvantaged class of persons; or
(3) Any special purpose credit program offered by a for-profit
organization or in which such an organization participates to meet
special social needs, if:
(i) The program is established and administered pursuant to a
written plan that identifies the class of persons that the program is
designed to benefit and sets forth the procedures and standards for
extending credit pursuant to the program; and
(ii) The program is established and administered to extend credit
to a class of persons who, under the organization's customary standards
of creditworthiness, probably would not receive such credit or would
receive it on less favorable terms than are ordinarily available to
other applicants applying to the organization for a similar type and
amount of credit.
(b) Rules in other sections--(1) General
applicability. All the provisions of this regulation apply to
each of the special purpose credit programs described in paragraph (a)
of this section except as modified by this section.
(2) Common characteristics. A program described in
paragraph (a)(2) or (a)(3) of this section qualifies as a special
purpose credit program only if it was established and is administered
so as not to discriminate against an applicant on any prohibited basis;
however, all program participants may be required to share one or more
common characteristics (for example, race, national origin, or sex) so
long as the program was not established and is not administered with
the purpose of evading the requirements of the Act or this regulation.
(c) Special rule concerning requests and use of
information. If participants in a special purpose credit program
described in paragraph (a) of this section are required to
possess
{{12-31-07 p.7218}}one or more common characteristics
(for example, race, national origin, or sex) and if the program
otherwise satisfies the requirements of paragraph (a) of this section,
a creditor may request and consider information regarding the common
characteristic(s) in determining the applicant's eligibility for the
program.
(d) Special rule in the case of financial need. If
financial need is one of the criteria under a special purpose program
described in paragraph (a) of this section, the creditor may
request and consider, in determining an applicant's eligibility for the
program, information regarding the applicant's marital status; alimony,
child support, and separate maintenance income; and the spouse's
financial resources. In addition, a creditor may obtain the
signature of an applicant's spouse or other person on an application or
credit instrument relating to a special purpose program if the
signature is required by federal or state law.
[Codified to 12 C.F.R. § 202.8]
§ 202.9 Notifications.
(a) Notification of action taken, ECOA notice, and statement
of specific reasons-- (1) When notification is
required. A creditor shall notify an applicant of action taken
within:
(i) 30 days after receiving a completed application concerning
the creditor's approval of, counteroffer to, or adverse action on the
application;
(ii) 30 days after taking adverse action on an incomplete
application, unless notice is provided in accordance with paragraph (c)
of this section;
(iii) 30 days after taking adverse action on an existing account;
or
(iv) 90 days after notifying the applicant of a counteroffer if
the applicant does not expressly accept or use the credit offered.
(2) Content of notification when adverse action is
taken. A notification given to an applicant when adverse action
is taken shall be in writing and shall contain a statement of the
action taken; the name and address of the creditor; a statement of the
provisions of § 701(a) of the Act; the name and address of the
federal agency that administers compliance with respect to the
creditor; and either:
(i) A statement of specific reasons for the action taken; or
(ii) A disclosure of the applicant's right to a statement of
specific reasons within 30 days, if the statement is requested within
60 days of the creditor's notification. The disclosure shall include
the name, address, and telephone number of the person or office from
which the statement of reasons can be obtained. If the creditor chooses
to provide the reasons orally, the creditor shall also disclose the
applicant's right to have them confirmed in writing within 30 days of
receiving the applicant's written request for confirmation.
(3) Notification to business credit applicants. For
business credit, a creditor shall comply with the notification
requirements of this section in the following manner:
(i) With regard to a business that had gross revenues of $1
million or less in its preceding fiscal year (other than an extension
of trade credit, credit incident to a factoring agreement, or other
similar types of business credit), a creditor shall comply with
paragraphs (a)(1) and (2) of this section, except that:
(A) The statement of the action taken may be given orally or in
writing, when adverse action is taken;
(B) Disclosure of an applicant's right to a statement of reasons
may be given at the time of application, instead of when adverse action
is taken, provided the disclosure contains the information required by
paragraph (a)(2)(ii) of this section; and the ECOA notice specified in
paragraph (b)(1) of this section;
(C) For an application made entirely by telephone, a creditor
satisfies the requirements of paragraph (a)(3)(i) of this section by an
oral statement of the action taken and of the applicant's right to a
statement of reasons for adverse action.
(ii) With regard to a business that had gross revenues in excess
of $1 million in its preceding fiscal year or an extension of trade
credit, credit incident to a factoring agreement, or other similar
types of business credit, a creditor shall:
(A) Notify the applicant, within a reasonable time, orally or in
writing, of the action taken; and
{{12-31-07 p.7219}}
(B) Provide a written statement of the reasons for adverse action
and the ECOA notice specified in paragraph (b)(1) of this section if
the applicant makes a written request for the reasons within 60 days of
the creditor's notification.
(b) Form of ECOA notice and statement of specific
reasons--(1) ECOA notice. To satisfy the disclosure requirements
of paragraph (a)(2) of this section regarding section 701(a) of the
Act, the creditor shall provide a notice that is substantially similar
to the following:
The federal Equal Credit Opportunity Act prohibits creditors from
discriminating against credit applicants on the basis of race, color,
religion, national origin, sex, marital status, age (provided the
applicant has the capacity to enter into a binding contract); because
all or part of the applicant's income derives from any public
assistance program; or because the applicant has in good faith
exercised any right under the Consumer Credit Protection Act. The
federal agency that administers compliance with this law concerning
this creditor is [name and address as specified by the appropriate
agency listed in appendix A of this regulation].
(2) Statement of specific reasons. The statement of
reasons for adverse action required by paragraph (a)(2)(i) of this
section must be specific and indicate the principal reason(s) for the
adverse action. Statements that the adverse action was based on the
creditor's internal standards or policies or that the applicant, joint
applicant, or similar party failed to achieve the qualifying score on
the creditor's credit scoring system are insufficient.
(c) Incomplete applications--(1) Notice
alternatives. Within 30 days after receiving an application that
is incomplete regarding matters that an applicant can complete, the
creditor shall notify the applicant either:
(i) Of action taken, in accordance with paragraph (a) of this
section; or
(ii) Of the incompleteness, in accordance with paragraph (c)(2)
of this section.
(2) Notice of incompleteness. If additional
information is needed from an applicant, the creditor shall send a
written notice to the applicant specifying the information needed,
designating a reasonable period of time for the applicant to provide
the information, and informing the applicant that failure to provide
the information requested will result in no further consideration being
given to the application. The creditor shall have no further obligation
under this section if the applicant fails to respond within the
designated time period. If the applicant supplies the requested
information within the designated time period, the creditor shall take
action on the application and notify the applicant in accordance with
paragraph (a) of this section.
(3) Oral request for information. At its option, a
creditor may inform the applicant orally of the need for additional
information. If the application remains incomplete the creditor shall
send a notice in accordance with paragraph (c)(1) of this section.
(d) Oral notifications by small-volume creditors. In
the case of a creditor that did not receive more than 150 applications
during the preceding calendar year, the requirements of this section
(including statements of specific reasons) are satisfied by oral
notifications.
(e) Withdrawal of approved application. When an
applicant submits an application and the parties contemplate that the
applicant will inquire about its status, if the creditor approves the
application and the applicant has not inquired within 30 days after
applying, the creditor may treat the application as withdrawn and need
not comply with paragraph (a)(1) of this section.
(f) Multiple applicants. When an application involves
more than one applicant, notification need only be given to one of
them, but must be given to the primary applicant where one is readily
apparent.
(g) Applications submitted through a third party. When
an application is made on behalf of an applicant to more than one
creditor and the applicant expressly accepts or uses credit offered by
one of the creditors, notification of action taken by any of the other
creditors is not required. If no credit is offered or if the applicant
does not expressly accept or use any credit offered, each creditor
taking adverse action must comply with this section, directly or
through a third party. A notice given by a third party shall disclose
the identity of each creditor on whose behalf the notice is given.
[Codified to 12 C.F.R. § 202.9]
[Section 202.9 amended at 68 Fed. Reg. 13161, March 18, 2003; 72
Fed. Reg. 63451, November 9, 2007, effective January 1, 2008, the
mandatory compliance date is November 1, 2008]
{{12-31-07 p.7220}}
§ 202.10 Furnishing of credit information.
(a) Designation of accounts. A creditor that furnishes
credit information shall designate:
(1) Any new account to reflect the participation of both spouses
if the applicant's spouse is permitted to use or is contractually
liable on the account (other than as a guarantor, surety, endorser, or
similar party); and
(2) Any existing account to reflect such participation, within 90
days after receiving a written request to do so from one of the
spouses.
(b) Routine reports to consumer reporting agency. If a
creditor furnishes credit information to a consumer reporting agency
concerning an account designated to reflect the participation of both
spouses, the creditor shall furnish the information in a manner that
will enable the agency to provide access to the information in the name
of each spouse.
(c) Reporting in response to inquiry. If a creditor
furnishes credit information in response to an inquiry, concerning an
account designated to reflect the participation of both spouses, the
creditor shall furnish the information in the name of the spouse about
whom the information is requested.
[Codified to 12 C.F.R. § 202.10]
§ 202.11 Relation to state law.
(a) Inconsistent state laws. Except as otherwise
provided in this section, this regulation alters, affects, or preempts
only those state laws that are inconsistent with the Act and this
regulation and then only to the extent of the inconsistency. A state
law is not inconsistent if it is more protective of an applicant.
(b) Preempted provisions of state law-- (1) A state law
is deemed to be inconsistent with the requirements of the Act and this
regulation and less protective of an applicant within the meaning of
section 705(f) of the Act to the extent that the law:
(i) Requires or permits a practice or act prohibited by the Act
or this regulation;
(ii) Prohibits the individual extension of consumer credit to
both parties to a marriage if each spouse individually and voluntarily
applies for such credit;
(iii) Prohibits inquiries or collection of data required to
comply with the Act or this regulation;
(iv) Prohibits asking about or considering age in an empirically
derived, demonstrably and statistically sound, credit scoring system to
determine a pertinent element of creditworthiness, or to favor an
elderly applicant; or
(v) Prohibits inquiries necessary to establish or administer a
special purpose credit program as defined by § 202.8.
(2) A creditor, state, or other interested party may request that
the Board determine whether a state law is inconsistent with the
requirements of the Act and this regulation.
(c) Laws on finance charges, loan ceilings. If married
applicants voluntarily apply for and obtain individual accounts with
the same creditor, the accounts shall not be aggregated or otherwise
combined for purposes of determining permissible finance charges or
loan ceilings under any federal or state law. Permissible loan ceiling
laws shall be construed to permit each spouse to become individually
liable up to the amount of the loan ceilings, less the amount for which
the applicant is jointly liable.
(d) State and federal laws not affected. This section
does not alter or annul any provision of state property laws, laws
relating to the disposition of decedents' estates, or federal or state
banking regulations directed only toward insuring the solvency of
financial institutions.
(e) Exemption for state-regulated
transactions--(1) Applications. A state may apply to
the Board for an exemption from the requirements of the Act and this
regulation for any class of credit transactions within the state. The
Board will grant such an exemption if the Board determines that:
(i) The class of credit transactions is subject to state law
requirements substantially similar to those of the Act and this
regulation or that applicants are afforded greater protection under
state law; and
(ii) There is adequate provision for state
enforcement.
{{4-30-03 p.7221}}
(2) Liability and enforcement. (i) No exemption will
extend to the civil liability provisions of
section 706 of the Act or the
administrative enforcement provisions of
section 704 of the Act.
(ii) After an exemption has been granted, the requirements of the
applicable state law (except for additional requirements not imposed by
federal law) will constitute the requirements of the Act and this
regulation.
[Codified to 12 C.F.R. § 202.11]
§ 202.12 Record retention.
(a) Retention of prohibited information. A creditor may
retain in its files information that is prohibited by the Act or this
regulation for use in evaluating applications, without violating the
Act or this regulation, if the information was obtained:
(1) From any source prior to March 23, 1977;
(2) From consumer reporting agencies, an applicant, or others
without the specific request of the creditor; or
(3) As required to monitor compliance with the Act and this
regulation or other federal or state statutes or regulations.
(b) Preservation of records.--(1)
Applications. For 25 months (12 months for business credit,
except as provided in paragraph (b)(5) of this section) after the date
that a creditor notifies an applicant of action taken on an application
or of incompleteness, the creditor shall retain in original form or a
copy thereof:
(i) any application that it receives, any information required to
be obtained concerning characteristics of the applicant to monitor
compliance with the Act and this regulation or other similar law, and
any other written or recorded information used in evaluating the
application and not returned to the applicant at the applicant's
request:
(ii) A copy of the following documents if furnished to the
applicant in written form (or, if furnished orally, any notation or
memorandum made by the creditor):
(A) The notification of action taken; and
(B) The statement of specific reasons for adverse action; and
(iii) Any written statement submitted by the applicant alleging a
violation of the Act or this regulation.
(2) Existing accounts. For 25 months (12 months for
business credit, except as provided in paragraph (b)(5) of this
section) after the date that a creditor notifies an applicant of
adverse action regarding an existing account, the creditor shall retain
as to that account, in original form or a copy thereof:
(i) Any written or recorded information concerning the adverse
action; and
(ii) Any written statement submitted by the applicant alleging a
violation of the Act or this regulation.
(3) Other applications. For 25 months (12 months for
business credit, except as provided in paragraph (b)(5) of this
section) after the date that a creditor receives an application for
which the creditor is not required to comply with the notification
requirements of § 202.9, the creditor shall retain all written or
recorded information in its possession concerning the applicant,
including any notation of action taken.
(4) Enforcement proceedings and investigations. A
creditor shall retain the information beyond 25 months (12 months for
business credit, except as provided in paragraph (b)(5) of this
section) if the creditor has actual notice that it is under
investigation or is subject to an enforcement proceeding for an alleged
violation of the Act or this regulation by the Attorney General of the
United States or by an enforcement agency charged with monitoring that
creditor's compliance with the Act and this regulation, or if it has
been served with notice of an action filed pursuant to section 706 of
the Act and § 202.17 of this regulation. The creditor shall retain
the information until final disposition of the matter, unless an
earlier time is allowed by order of the agency or court.
(5) Special rule for certain business credit
applications. With regard to a business that had gross revenues in
excess of $1 million in its preceding fiscal year, or an extension of
trade credit, credit incident to a factoring agreement or other similar
types of business credit, the creditor shall retain records for at
least 60 days after notifying the applicant of
{{4-30-03 p.7222}}the action taken. If within that
time period the applicant requests in writing the reasons for adverse
action or that records be retained, the creditor shall retain records
for 12 months.
(6) Self-tests. For 25 months after a self-test (as
defined in § 202.15) has been completed, the creditor shall retain
all written or recorded information about the self-test. A creditor
shall retain information beyond 25 months if it has actual notice that
it is under investigation or is subject to an enforcement proceeding
for an alleged violation, or if it has been served with notice of a
civil action. In such cases, the creditor shall retain the information
until final disposition of the matter, unless an earlier time is
allowed by the appropriate agency or court order.
(7) Prescreened solicitations. For 25 months after the
date on which an offer of credit is made to potential customers (12
months for business credit, except as provided in paragraph (b)(5) of
this section), the creditor shall retain in original form or a copy
thereof:
(i) The text of any prescreened solicitation;
(ii) The list of criteria the creditor used to select potential
recipients of the solicitation; and
(iii) Any correspondence related to complaints (formal or
informal) about the solicitation.
[Codified to 12 C.F.R. § 202.12]
§ 202.13 Information for monitoring purposes.
(a) Information to be requested--(1) A creditor that
receives an application for credit primarily for the purchase or
refinancing of a dwelling occupied or to be occupied by the applicant
as a principal residence, where the extension of credit will be secured
by the dwelling, shall request as part of the application the following
information regarding the applicant(s):
(i) Ethnicity, using the categories Hispanic or Latino, and not
Hispanic or Latino; and race, using the categories American Indian or
Alaska Native, Asian, Black or African American, Native Hawaiian or
Other Pacific Islander, and White;
(ii) Sex;
(iii) Marital status, using the categories married, unmarried,
and separated; and
(iv) Age.
(2) Dwelling means a residential structure that
contains one to four units, whether or not that structure is attached
to real property. The term includes, but is not limited to, an
individual condominium or cooperative unit and a mobile or other
manufactured home.
(b) Obtaining of information. Questions regarding
ethnicity, race, sex, marital status, and age may be listed, at the
creditor's option, on the application form or on a separate form that
refers to the application. The applicant(s) shall be asked but not
required to supply the requested information. If the applicant(s)
chooses not to provide the information or any part of it, that fact
shall be noted on the form. The creditor shall then also note on the
form, to the extent possible, the ethnicity, race, and sex of the
applicant(s) on the basis of visual observation or surname.
(c) Disclosure to applicant(s). The creditor shall
inform the applicant(s) that the information regarding ethnicity, race,
sex, marital status, and age is being requested by the federal
government for the purpose of monitoring compliance with federal
statutes that prohibit creditors from discriminating against applicants
on those bases. The creditor shall also inform the applicant(s) that if
the applicant(s) chooses not to provide the information, the creditor
is required to note the ethnicity, race and sex on the basis of visual
observation or surname.
(d) Substitute monitoring program. A monitoring program
required by an agency charged with administrative enforcement under
section 704 of the Act may be substituted for the requirements
contained in paragraphs (a), (b), and (c) of this section.
[Codified to 12 C.F.R. § 202.13]
{{4-30-03 p.7223}}
§ 202.14 Rules on providing appraisal reports.
(a) Providing appraisals. A creditor shall provide a
copy of an appraisal report used in connection with an application for
credit that is to be secured by a lien on a dwelling. A creditor shall
comply with either paragraph (a)(1) or (a)(2) of this section.
(1) Routine delivery. A creditor may routinely provide
a copy of an appraisal report to an applicant (whether credit is
granted or denied or the application is withdrawn).
(2) Upon request. A creditor that does not routinely
provide appraisal reports shall provide a copy upon an applicant's
written request.
(i) Notice. A creditor that provides appraisal reports
only upon request shall notify an applicant in writing of the right to
receive a copy of an appraisal report. The notice may be given at any
time during the application process but no later than when the creditor
provides notice of action taken under § 202.9 of this regulation. The
notice shall specify that the applicant's request must be in writing,
give the creditor's mailing address, and state the time for making the
request as provided in paragraph (a)(2)(ii) of this section.
(ii) Delivery. A creditor shall mail or deliver a copy
of the appraisal report promptly (generally within 30 days) after the
creditor receives an applicant's request, receives the report, or
receives reimbursement from the applicant for the report, whichever is
last to occur. A creditor need not provide a copy when the applicant's
request is received more than 90 days after the creditor has provided
notice of action taken on the application under § 202.9 of this
regulation or 90 days after the application is withdrawn.
(b) Credit unions. A creditor that is subject to the
regulations of the National Credit Union Administration on making
copies of appraisal reports available is not subject to this section.
(c) Definitions. For purposes of paragraph (a) of this
section, the term dwelling means a residential structure that contains
one to four units whether or not that structure is attached to real
property. The term includes, but is not limited to, an individual
condominium or cooperative unit, and a mobile or other manufactured
home. The term appraisal report means the document(s) relied
upon by a creditor in evaluating the value of the dwelling.
[Codified to 12 C.F.R. § 202.14]
§ 202.15 Incentives for self-testing and self-correction.
(a) General rules--(1) Voluntary self-testing and
correction. The report or results of the self-test that a creditor
voluntarily conducts (or authorizes) are privileged as provided in this
section. Data collection required by law or by any governmental
authority is not a voluntary self-test.
(2) Corrective action required. The privilege in this
section applies only if the creditor has taken or is taking appropriate
corrective action.
(3) Other privileges. The privilege created by this
section does not preclude the assertion of any other privilege that may
also apply.
(b) Self-test defined--(1) Definition. A
self-test is any program, practice, or study that:
(i) Is designed and used specifically to determine the extent or
effectiveness of a creditor's compliance with the Act or this
regulation; and
(ii) Creates data or factual information that is not available
and cannot be derived from loan or application files or other records
related to credit transactions.
(2) Types of information privileged. The privilege
under this section applies to the report or results of the self-test,
data or factual information created by the self-test, and any analysis,
opinions, and conclusions pertaining to the self-test report or
results. The privilege covers workpapers or draft documents as well as
final documents.
(3) Types of information not privileged. The privilege
under this section does not apply to:
(i) Information about whether a creditor conducted a self-test,
the methodology used or the scope of the self-test, the time period
covered by the self-test, or the dates it was conducted;
or
{{4-30-03 p.7224}}
(ii) Loan and application files or other business records related
to credit transactions, and information derived from such files and
records, even if the information has been aggregated, summarized, or
reorganized to facilitate analysis.
(c) Appropriate corrective action--(1) General
requirement. For the privilege in this section to apply,
appropriate corrective action is required when the self-test shows that
it is more likely than not that a violation occurred, even though no
violation has been formally adjudicated.
(2) Determining the scope of appropriate corrective
action. A creditor must take corrective action that is reasonably
likely to remedy the cause and effect of a likely violation by:
(i) Identifying the policies or practices that are the likely
cause of the violation; and
(ii) Assessing the extent and scope of any violation.
(3) Types of relief. Appropriate corrective action may
include both prospective and remedial relief, except that to establish
a privilege under this section:
(i) A creditor is not required to provide remedial relief to a
tester used in a self-test;
(ii) A creditor is only required to provide remedial relief to an
applicant identified by the self-test as one whose rights were more
likely than not violated; and
(iii) A creditor is not required to provide remedial relief to a
particular applicant if the statute of limitations applicable to the
violation expired before the creditor obtained the results of the
self-test or the applicant is otherwise ineligible for such relief.
(4) No admission of violation. Taking corrective
action is not an admission that a violation occurred.
(d) Scope of privilege--(1) General rule. The
report or results of a privileged self-test may not be obtained or
used:
(i) By a government agency in any examination or investigation
relating to compliance with the Act or this regulation; or
(ii) By a government agency or an applicant (including a
prospective applicant who alleges a violation of § 202.4(b)) in any
proceeding or civil action in which a violation of the Act or this
regulation is alleged.
(2) Loss of privilege. The report or results of a
self-test are not privileged under paragraph (d)(1) of this section if
the creditor or a person with lawful access to the report or results:
(i) Voluntarily discloses any part of the report or results, or
any other information privileged under this section, to an applicant or
government agency or to the public;
(ii) Discloses any part of the report or results, or any other
information privileged under this section, as a defense to charges that
the creditor has violated the Act or regulation; or
(iii) Fails or is unable to produce written or recorded
information about the self-test that is required to be retained under
§ 202.12(b)(6) when the information is needed to determine whether
the privilege applies. This paragraph does not limit any other penalty
or remedy that may be available for a violation of § 202.12.
(3) Limited use of privileged information.
Notwithstanding paragraph (d)(1) of this section, the self-test report
or results and any other information privileged under this section may
be obtained and used by an applicant or government agency solely to
determine a penalty or remedy after a violation of the Act or this
regulation has been adjudicated or admitted. Disclosures for this
limited purpose may be used only for the particular proceeding in which
the adjudication or admission was made. Information disclosed under
this paragraph (d)(3) remains privileged under paragraph (d)(1) of this
section.
[Codified to 12 C.F.R. § 202.15]
{{4-30-08 p.7225}}
§ 202.16 Enforcement, penalties and liabilities.
(a) Administrative enforcement--(1) As set forth more
fully in section 704 of the Act, administrative enforcement of the Act
and this regulation regarding certain creditors is assigned to the
Comptroller of the Currency, Board of Governors of the Federal Reserve
System, Board of Directors of the Federal Deposit Insurance
Corporation, Office of Thrift Supervision, National Credit Union
Administration, Surface Transportation Board, Secretary of Agriculture,
Farm Credit Administration, Securities and Exchange Commission, Small
Business Administration, and Secretary of Transportation.
(2) Except to the extent that administrative enforcement is
specifically assigned to other authorities, compliance with the
requirements imposed under the Act and this regulation is enforced by
the Federal Trade Commission.
(b) Penalties and liabilities--(1) Sections
702(g) and
706(a) and (b) of the Act provide
that any creditor that fails to comply with a requirement imposed by
the Act or this regulation is subject to civil liability for actual and
punitive damages in individual or class actions. Pursuant to sections
702(g) and 704(b), (c), and (d)
of the Act, violations of the Act or this regulation also constitute
violations of other federal laws. Liability for punitive damages can
apply only to nongovernmental entities and is limited to $10,000 in
individual actions and the lesser of $500,000 or 1 percent of the
creditor's net worth in class actions. Sections 706(c) provides for
equitable and declaratory relief and section 706(d) authorizes the
awarding of costs and reasonable attorney's fees to an aggrieved
applicant in a successful action.
(2) As provided in section 706(f), a civil action under the Act
or this regulation may be brought in the appropriate United States
district court without regard to the amount in controversy or in any
other court of competent jurisdiction within two years after the date
of the occurrence of the violation, or within one year after the
commencement of an administrative enforcement proceeding or of a civil
action brought by the Attorney General of the United States within two
years after the alleged violation.
(3) If an agency responsible for administrative enforcement is
unable to obtain compliance with the Act or this regulation, it may
refer the matter to the Attorney General of the United States. If the
Board, the Comptroller of the Currency, the Federal Deposit Insurance
Corporation, the Office of Thrift Supervision, or the National Credit
Union Administration has reason to believe that one or more creditors
have engaged in a pattern or practice of discouraging or denying
applications in violation of the Act or this regulation, the agency
shall refer the matter to the Attorney General. If the agency has
reason to believe that one or more creditors violated section
701(a) of the Act, the agency may
refer a matter to the Attorney General.
(4) On referral, or whenever the Attorney General has reason to
believe that one or more creditors have engaged in a pattern or
practice in violation of the Act or this regulation, the Attorney
General may bring a civil action for such relief as may be appropriate,
including actual and punitive damages and injunctive relief.
(5) If the Board, the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, the Office of Thrift Supervision, or the
National Credit Union Administration has reason to believe (as a result
of a consumer complaint, a consumer compliance examination, or some
other basis) that a violation of the Act or this regulation has
occurred which is also a violation of the Fair Housing Act, and the
matter is not referred to the Attorney General, the agency shall:
(i) Notify the Secretary of Housing and Urban Development; and
(ii) Inform the applicant that the Secretary of Housing and Urban
Development has been notified and that remedies may be available under
the Fair Housing Act.
(c) Failure of compliance. A creditor's failure to
comply with §§ 202.6(b)(6), 202.9, 202.10, 202.12 or 202.13 is not a
violation if it results from an inadvertent error. On discovering an
error under §§ 202.9 and 202.10, the creditor shall correct it as
soon as possible. If a creditor inadvertently obtains the monitoring
information regarding the ethnicity, race, and sex of the applicant in
a dwelling-related transaction not covered by
{{4-30-08 p.7226}}§ 202.13, the creditor may
retain information and act on the application without violating the
regulation.
[Codified to 12 C.F.R. § 202.16]
[Section 202.17 redesignated as 202.16 at 72 Fed. Reg. 63451,
November 9, 2007, effective December 10, 2007, the mandatory compliance
date is October 1, 2008]
Appendix A to Part 202—Federal Enforcement Agencies
The following list indicates the federal agencies that enforce
Regulation B for particular classes of creditors. Any questions
concerning a particular creditor should be directed to its enforcement
agency. Terms that are not defined in the Federal Deposit Insurance Act
(12 U.S.C. 1813(s)) shall have
the meaning given to them in the International Banking Act of 1978
(12 U.S.C. 3101).
National Banks, and federal branches and federal agencies of
foreign banks:
Office of the Comptroller of the Currency, Customer Assistance
Group, 1301 McKinney Street, Suite 3450, Houston, Texas 77010-9050.
State member banks, branches and agencies of foreign banks
(other than federal branches, federal agencies, and insured state
branches of foreign banks), commercial lending companies owned or
controlled by foreign banks, and organizations operating under section
25 or 25A of the Federal Reserve Act:
Federal Reserve Consumer Help Center, P.O. Box 1200, Minneapolis, MN
55480, toll-free number: (888) 851--1920, fax number: (877) 888--2520,
TDD number: (877) 766--8533.
{{10-31-08 p.7227}}Savings institutions under the Savings Association
Insurance Fund of the FDIC and federally chartered savings banks
insured under the Bank Insurance Fund of the FDIC (but not including
state-chartered savings banks insured under the Bank Insurance Fund):
Office of Thrift Supervision, Consumer Response Unit, 1700 G Street,
NW., Washington, DC 20552. Federal Credit Unions:
Regional office of the National Credit Union Administration serving
the area in which the federal credit union is located.Air carriers:
Assistant General Counsel for Aviation Enforcement and Proceedings,
Department of Transportation, 400 Seventh Street SW., Washington, DC
20590.
Creditors Subject to Surface Transportation Board:
Office of Proceedings, Surface Transportation Board, Department of
Transportation, 1925 K Street NW., Washington, DC 20423.
Creditors Subject to Packers and Stockyards Act:
Nearest Packers and Stockyards Administration area supervisor.
Small Business Investment Companies:
Associate Deputy Administrator for Capital Access, United States
Small Business Administration, 409 Third Street, SW., 8th Floor,
Washington, DC 20416.
Brokers and Dealers:
Securities and Exchange Commission, Washington, DC 20549.Federal Land Banks, Federal Land Bank
Associations, Federal Intermediate Credit Banks, and Production Credit
Associations:
Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA
22102-5090.
Retailers, Finance Companies, and All Other Creditors Not
Listed Above:
FTC Regional Office for region in which the creditor operates or
Federal Trade Commission, Equal Credit Opportunity, Washington, DC
20580.
[Codified to 12 C.F.R. Part 202, Appendix A; 71 Fed. Reg.
11297, March 7, 2006]
[Appendix A amended at 71 Fed. Reg. 28563, May 17, 2006; 72 Fed.
Reg. 55020, September 28, 2007, effective October 29, 2007, compliance
optional until October 1, 2008; 73 Fed. Reg. 53685, September 17, 2008,
effective October 17, 2008, compliance optional until September 17,
2009]
Appendix B to Part 202—Model Application Forms
1. This appendix contains five model credit application forms, each
designated for use in a particular type of consumer credit transaction
as indicated by the bracketed caption on each form. The first sample
form is intended for use in open-end, unsecured transactions; the
second for closed-end, secured transactions; the third for closed-end
transactions, whether unsecured or secured; the fourth in transactions
involving community property or occurring in community property states;
and the fifth in residential mortgage transactions which contains a
model disclosure for use in complying with § 202.13 for certain
dwelling-related loans. All forms contained in this appendix are
models; their use by creditors is optional.
2. The use or modification of these forms is governed by the
following instructions. A creditor may change the forms: by asking for
additional information not prohibited by § 202.5; by deleting any
information request; or by rearranging the format without modifying the
substance of the inquiries. In any of these three instances, however,
the appropriate notices regarding the optional nature of courtesy
titles, the option to disclose alimony, child support, or separate
maintenance, and the limitation concerning marital status inquiries
must be included in the appropriate places if the items to which they
relate appear on the creditor's form.
3. If a creditor uses an appropriate Appendix B model form, or
modifies a form in accordance with the above instructions, that
creditor shall be deemed to be acting in compliance with the provisions
of paragraphs (b), (c), and (d) of § 202.5 of this
regulation.
{{10-31-08 p.7228}}
{{4-30-03 p.7229}} _______
{{4-30-03 p.7230}} _______
{{4-30-03 p.7231}} _______
{{4-30-03 p.7232}} _______
{{4-30-03 p.7233}} _______
{{4-30-03 p.7234}} _______
{{10-31-03 p.7235}}
{{10-31-03 p.7236}} _______
{{10-31-03 p.7237}} _______
{{10-31-03 p.7238}}_______
{{10-31-03 p.7239}} _______
[Codified to 12 C.F.R. Part 202, Appendix B]
amended at 68 Fed. Reg. 53492, September, 2003 effective January 1,
2004]
{{10-31-03 p.7240}}
Appendix C to Part 202—Sample Notification Forms
1. This appendix contains ten sample notification forms. Forms C--1
through C--4 are intended for use in notifying an applicant that
adverse action has been taken on an application or account under
§ 202.9(a)(1) and (2)(i) of this regulation. Form C--5 is a notice of
disclosure of the right to request specific reasons for adverse action
under §§ 202.9(a)(1) and (2)(ii). Form C--6 is designed for use in
notifying an applicant, under § 202.9(c)(2), that an application is
incomplete. Forms C--7 and C--8 are intended for use in connection with
applications for business credit under § 202.9(a)(3). Form C--9 is
designed for use in notifying an applicant of the right to receive a
copy of an appraisal under § 202.14. Form C--10 is designed for use
in notifying an applicant for nonmortgage credit that the creditor is
requesting applicant characteristic information.
2. Form C--1 contains the Fair Credit Reporting Act disclosure as
required by sections 615(a) and (b) of that act. Forms C--2 through
C--5 contain only the section 615(a) disclosure (that a creditor
obtained information from a consumer reporting agency that played a
part in the credit decision). A creditor must provide the 615(a)
disclosure when adverse action is taken against a consumer based on
information from a consumer reporting agency. A creditor must provide
the section 615(b) disclosure when adverse action is taken based on
information from an outside source other than a consumer reporting
agency. In addition, a creditor must provide the section 615(b)
disclosure if the creditor obtained information from an affiliate other
than information in a consumer report or other than information
concerning the affiliate's own transactions or experiences with the
consumer. Creditors may comply with the disclosure requirements for
adverse action based on information in a consumer report obtained from
an affiliate by providing either the section 615(a) or
section 615(b) disclosure.
3. The sample forms are illustrative and may not be appropriate for
all creditors. They were designed to include some of the factors that
creditors most commonly consider. If a creditor chooses to use the
checklist of reasons provided in one of the sample forms in this
appendix and if reasons commonly used by the creditor are not provided
on the form, the creditor should modify the checklist by substituting
or adding other reasons. For example, if "inadequate down
payment" or "no deposit relationship with us" are common
reasons for taking adverse action on an application, the creditor ought
to add or substitute such reasons for those presently contained on the
sample forms.
4. If the reasons listed on the forms are not the factors actually
used, a creditor will not satisfy the notice requirement by simply
checking the closest identifiable factor listed. For example, some
creditors consider only references from banks or other depository
institutions and disregard finance company references altogether; their
statement of reasons should disclose "insufficient bank
references," not "insufficient credit references." Similarly,
a creditor that considers bank references and other credit references
as distinct factors should treat the two factors separately and
disclose them as appropriate. The creditor should either add such other
factors to the form or check "other" and include the appropriate
explanation. The creditor need not, however, describe how or why a
factor adversely affected the application. For example, the notice may
say "length of residence" rather than "too short a period of
residence."
5. A creditor may design its own notification forms or use all or a
portion of the forms contained in this appendix. Proper use of Forms
C--1 through C--4 will satisfy the requirement of § 202.9(a)(2)(i).
Proper use of Forms C--5 and C--6 constitutes full compliance with
§§ 202.9(a)(2)(ii) and 202.9(c)(2), respectively. Proper use of
Forms C--7 and C--8 will satisfy the requirements of § 202.9(a)(2)(i)
and (ii), respectively, for applications for business credit. Proper
use of Form C--9 will satisfy the requirements of § 202.14 of this
part. Proper use of Form C--10 will satisfy the requirements of
§ 202.5(b)(1).
{{4-30-03 p.7241}}
FORM C–1—SAMPLE NOTICE OF ACTION TAKEN AND STATEMENT OF
REASONS
Statement of Credit Denial, Termination, or
Change Date: _______
Applicant's Name: ____________________________________________ Applicant's
Address: ____________________________________________ Description of Account, Transaction,
or Requested Credit: ____________________________________________ Description of
Action Taken: ____________________________________________ ____________________________________________
PART I -- PRINCIPAL REASON(S) FOR CREDIT DENIAL,
TERMINATION, OR OTHER ACTION TAKEN CONCERNING CREDIT. This
section must be completed in all instances.
_______ Credit application incomplete
_______ Insufficient number of credit
references provided
_______ Unacceptable type of credit
references provided
_______ Unable to
verify credit references _______ Temporary or
irregular employment _______ Unable to verify
employment _______ Length of employment
_______ Income insufficient for amount of
credit requested
_______ Excessive
obligations in relation to income
_______ Unable to verify income
_______ Length of residence
_______ Temporary residence
_______ Unable to verify residence
_______ No credit file
_______ Limited credit experience
_______ Poor credit performance with us
_______ Delinquent past or present credit
obligations with others
_______ Collection
action or judgment _______ Garnishment or
attachment _______ Foreclosure or
repossession _______ Bankruptcy
_______ Number of recent inquiries on credit
bureau report
_______ Value or type of
collateral not sufficient
_______ Other,
specify: _______
{{4-30-03 p.7242}}
PART II -- DISCLOSURE OF USE OF
INFORMATION OBTAINED FROM AN OUTSIDE SOURCE. This section should be
completed if the credit decision was based in whole or in part on
information that has been obtained from an outside source.
_______ Our credit decision was based in whole or in
part on information obtained in a report from the consumer reporting
agency listed below. You have a right under the Fair Credit Reporting
Act to know the information contained in your credit file at the
consumer reporting agency. The reporting agency played no part in our
decision and is unable to supply specific reasons why we have denied
credit to you. You also have a right to a free copy of your report from
the reporting agency, if you request it no later than 60 days after you
receive this notice. In addition, if you find that any information
contained in the report you receive is inaccurate or incomplete, you
have the right to dispute the matter with the reporting agency.
Name: ____________________________________________ ____________________________________________
Address: ____________________________________________ ____________________________________________ [Toll-free]
Telephone number: ____________________________________________
_______ Our credit decision was based in whole or in
part on information obtained from an affiliate or from an outside
source other than a consumer reporting agency. Under the Fair Credit
Reporting Act, you have the right to make a written request, no later
than 60 days after you receive this notice, for disclosure of the
nature of this information.
_______ If
you have any questions regarding this notice, you should
contact: Creditor's
name: ____________________________________________ Creditor's address: ____________________________________________
Creditor's telephone number: _______
NOTICE
The federal Equal Credit Opportunity Act prohibits creditors from
discriminating against credit applicants on the basis of race, color,
religion, national origin, sex, marital status, age (provided the
applicant has the capacity to enter into a binding contract); because
all or part of the applicant's income derives from any public
assistance program; or because the applicant has in good faith
exercised any right under the Consumer Credit Protection Act. The
federal agency that administers compliance with this law concerning
this creditor is (name and address as specified by the appropriate
agency listed in Appendix A).
{{4-30-03 p.7243}}
FORM C-2—SAMPLE NOTICE OF ACTION TAKEN AND STATEMENT OF
REASONS
Date Dear Applicant: Thank you for your
recent application. Your request for [a loan/a credit card/ an
increase in your credit limit] was carefully considered, and we regret
that we are unable to approve your application at this time, for the
following reason(s): Your Income:
_______ is below our minimum requirement.
_______ is insufficient to sustain payments on the amount of
credit requested.
_______ could not be
verified. Your Employment: _______ is not
of sufficient length to qualify. _______ could not be
verified. Your Credit History: _______ of
making payments on time was not satisfactory. _______ could
not be verified. Your Application:
_______ lacks a sufficient number of credit references.
_______ lacks acceptable types of credit references.
_______ reveals that current obligations are excessive in
relation to income. Other: _______
The consumer reporting agency contacted that provided information
that influenced our decision in whole or in part was [name, address
and [toll-free] telephone number of the reporting agency]. The
reporting agency played no part in our decision is unable to supply
specific reasons why we have denied credit to you. You have a right
under the Fair Credit Reporting Act to know the information contained
in your credit file at the consumer reporting agency. You also have a
right to a free copy of your report from the reporting agency, if you
request it no later than 60 days after you receive this notice. In
addition, if you find that any information contained in the report you
receive is inaccurate or incomplete, you have the right to dispute the
matter with the reporting agency. Any questions regarding such
information should be directed to [consumer reporting agency]. If you
have any questions regarding this letter, you should contact us at
[creditor's name, address and telephone number].
NOTICE: The federal Equal Credit Opportunity Act prohibits
creditors from discriminating against credit applicants on the basis of
race, color, religion, national origin, sex, marital status, age
(provided the applicant has the capacity to enter into a binding
contract); because all or part of the applicant's income derives from
any public assistance program; or because the applicant has in good
faith exercised any right under the Consumer Credit Protection Act. The
federal agency that administers compliance with this law concerning
this creditor is (name and address as specified by the appropriate
agency listed in Appendix A).
{{4-30-03 p.7244}}
FORM C-3—SAMPLE NOTICE OF ACTION TAKEN AND STATEMENT OF
REASONS (CREDIT SCORING)
Date Dear Applicant: Thank you for your
recent application for _____________________ . We regret that we are unable to
approve your request. Your application was processed by a
credit scoring system that assigns a numerical value to the various
items of information we consider in evaluating an application. These
numerical values are based upon the results of analyses of repayment
histories of large numbers of customers. The information
you provided in your application did not score a sufficient number of
points for approval of the application. The reasons why you did not
score well compared to other applicants were:
• Insufficient bank references • Type of
occupation • Insufficent credit experience • Number of
recent inquiries on credit bureau report
In evaluating
your application the consumer reporting agency listed below provided us
with information that in whole or in part influenced our decision. The
consumer reporting agency played no part in our decision and is unable
to supply specific reasons why we have denied credit to you. You have a
right under the Fair Credit Reporting Act to know the information
contained in your credit file at the consumer reporting agency. It can
be obtained by contacting: [name, address, and [toll-free] telephone
number of the consumer reporting agency]. You also have a right to a
free copy of your report from the reporting agency, if you request it
no later than 60 days after you receive this notice. In addition, if
you find that any information contained in the report you receive is
inaccurate or incomplete, you have the right to dispute the matter with
the reporting agency. If you have any questions regarding
this letter, you should contact us at Creditor's
Name: ____________________________________________ Address: ____________________________________________ ____________________________________________
Telephone: ____________________________________________
Sincerely, NOTICE: The
federal Equal Credit Opportunity Act prohibits creditors from
discriminating against credit applicants on the basis of race, color,
religion, national origin, sex, marital status, age (with certain
limited exceptions); because all or part of the applicant's income
derives from any public assistance program; or because the applicant
has in good faith exercised any right under the Consumer Credit
Protection Act. The federal agency that administers compliance with
this law concerning this creditor is (name and address as specified by
the appropriate agency listed in appendix A).
{{4-30-03 p.7245}}
FORM C-4—SAMPLE NOTICE OF ACTION TAKEN, STATEMENT OF REASONS
AND COUNTEROFFER
Date Dear
Applicant: Thank you for your application for
_______ . We are unable to offer you credit on the terms that
you requested for the following reason(s): ____________________________________________ .
We can, however, offer you credit on the following
terms: _______ ____________________________________________ . If this offer is
acceptable to you, please notify us within [amount of time] at the
following address: ____________________________________________ . Our credit decision
on your application was based in whole or in part on information
obtained in a report from [name, address and [toll-free] telephone
number of the consumer reporting agency]. You have a right under the
Fair Credit Reporting Act to know the information contained in your
credit file at the consumer reporting agency. The reporting agency
played no part in our decision and is unable to supply specific reasons
why we have denied credit to you. You also have a right to a free copy
of your report from the reporting agency, if you request it no later
than 60 days after you receive this notice. In addition, if you find
that any information contained in the report you receive is inaccurate
or incomplete, you have the right to dispute the matter with the
reporting agency. You should know that the federal Equal
Credit Opportunity Act prohibits creditors, such as ourselves, from
discriminating against credit applicants on the basis of their race,
color, religion, national origin, sex, marital status, age, (provided
the applicant has the capacity to enter into a binding contract),
because they receive income from a public assistance program, or
because they may have exercised their rights under the Consumer Credit
Protection Act. If you believe there has been discrimination in
handling your application you should contact the [name and address of
the appropriate federal enforcement agency listed in Appendix
A].
Sincerely,
{{4-30-03 p.7246}}
FORM C–5—SAMPLE DISCLOSURE OF RIGHT TO REQUEST SPECIFIC
REASONS FOR CREDIT DENIAL
Date Dear
Applicant: Thank you for applying to us
for _______ . After carefully reviewing your
application, we are sorry to advise you that we cannot [open an
account for you/grant a loan to you/increase your credit limit] at
this time. If you would like a statement of specific reasons why your
application was denied, please contact [our credit service manager]
shown below within 60 days of the date of this letter. We will provide
you with the statement of reasons within 30 days after receiving your
request. Creditor's Name Address Telephone
number
If we obtained information from a consumer
reporting agency as part of our consideration of your application, its
name, address, and [toll-free] telephone number is shown below. The
reporting agency played no part in our decision and is unable to supply
specific reasons why we have denied credit to you. [You have a right
under the Fair Credit Reporting Act to know the information contained
in your credit file at the consumer reporting agency.] You have a
right to a free copy of your report from the reporting agency, if you
request it no later than 60 days after you receive this notice. In
addition, if you find that any information contained in the report you
receive is inaccurate or incomplete, you have the right to dispute the
matter with the reporting agency. You can find out about the
information contained in your file (if one was used) by
contacting: Consumer reporting agency's name
Address [Toll-free] Telephone number
Sincerely, NOTICE
The federal Equal Credit Opportunity Act prohibits creditors
from discriminating against credit applicants on the basis of race,
color, religion, national origin, sex, marital status, age (provided
the applicant has the capacity to enter into a binding contract);
because all or part of the applicant's income derives from any public
assistance program; or because the applicant has in good faith
exercised any right under the Consumer Credit Protection Act. The
federal agency that administers compliance with this law concerning
this creditor is (name and address as specified by the appropriate
agency listed in appendix A).
{{4-30-03 p.7247}}
FORM C--6--SAMPLE NOTICE OF INCOMPLETE APPLICATION AND REQUEST FOR
ADDITIONAL INFORMATION Creditor's name
Address Telephone number
Date Dear
Applicant: Thank you for your application for credit. The
following information is needed to make a decision on your
application: _______ _______We need to
receive this information by (date) . If we
do not receive it by that date, we will regrettably be unable to give
further consideration to your credit request.
Sincerely,
FORM C--7--SAMPLE NOTICE OF ACTION TAKEN AND STATEMENT OF REASONS
(BUSINESS CREDIT) Creditor's name
Creditor's address
Date
Dear Applicant: Thank you for applying to us for credit. We have
given your request careful consideration, and regret that we are unable
to extend credit to you at this time for the following reasons:
(Insert appropriate reason, such as Value or type of collateral not
sufficient; Lack of established earnings record; Slow or past due in
trade or loan payments)
Sincerely,
Notice: The federal Equal Credit Opportunity Act
prohibits creditors from discriminating against credit applicants on
the basis of race, color, religion, national origin, sex, marital
status, age (provided the applicant has the capacity to enter into a
binding contract); because all or part of the applicant's income
derives from any public assistance program; or because the applicant
has in good faith exercised any right under the Consumer Credit
Protection Act. The federal agency that administers compliance with
this law concerning this creditor is (name and address as specified by
the appropriate agency listed in appendix A).
FORM C--8--SAMPLE DISCLOSURE OF RIGHT TO REQUEST SPECIFIC REASONS
FOR CREDIT DENIAL GIVEN AT TIME OF APPLICATION (BUSINESS
CREDIT) Creditor's name Creditor's
address
If your application for business credit is denied, you have the
right to a written statement of the specific reasons for the denial. To
obtain the statement, please contact (name, address and telephone
number of the person or office from which the statement of reasons can
be obtained) within 60 days from the date you are notified of our
decision. We will send you a written statement of reasons for the
denial within 30 days of receiving your request for the
statement.
{{4-30-03 p.7248}}
Notice: The federal Equal Credit Opportunity Act
prohibits creditors from discriminating against credit applicants on
the basis of race, color, religion, national origin, sex, marital
status, age (provided the applicant has the capacity to enter into a
binding contract); because all or part of the applicant's income
derives from any public assistance program; or because the applicant
has in good faith exercised any right under the Consumer Credit
Protection Act. The federal agency that administers compliance with
this law concerning this creditor is (name and address as specified by
the appropriate agency listed in appendix A).
FORM C--9--SAMPLE DISCLOSURE OF RIGHT TO RECEIVE A COPY OF AN
APPRAISAL
You have the right to a copy of the appraisal report used in
connection with your application for credit. If you wish a copy, please
write to us at the mailing address we have provided. We must hear from
you no later than 90 days after we notify you about the action taken on
your credit application or you withdraw your application.
[In your letter, give us the following information:]
FORM C--10--SAMPLE DISCLOSURE ABOUT VOLUNTARY DATA NOTATION
We are requesting the following information to monitor our
compliance with the federal Equal Credit Opportunity Act, which
prohibits unlawful discrimination. You are not required to provide this
information. We will not take this information (or your decision not to
provide this information) into account in connection with your
application or credit transaction. The law provides that a creditor may
not discriminate based on this information, or based on whether or not
you choose to provide it. [If you choose not to provide the
information, we will note it by visual observation or surname].
[Codified to 12 C.F.R. Part 202, Appendix
C]
Appendix D to Part 202—Issuance of staff interpretations
1. Official Staff Interpretations. Officials in the
Board's Division of Consumer and Community Affairs are authorized to
issue official staff interpretations of this regulation. These
interpretations provide the protection afforded under
section 706(e) of the Act. Except
in unusual circumstances, such interpretations will not be issued
separately but will be incorporated in an official commentary to the
regulation, which will be amended periodically.
2. Requests for Issuance of Official Staff Interpretations.
A request for an official staff interpretation should be in
writing and addressed to the Director, Division of Consumer and
Community Affairs, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551. The request should contain a complete statement
of all relevant facts concerning the issue, including copies of all
pertinent documents.
3. Scope of Interpretations. No staff interpretations
will be issued approving creditor's forms or statements. This
restriction does not apply to forms or statements whose use is required
or sanctioned by a government agency.
[Codified to 12 C.F.R. Part 202, Appendix
D]
1 This paragraph does not limit or abrogate any Federal or
State law regarding privacy, privileged information, credit reporting
limitations, or similar restrictions on obtainable information. Go Back to Text
2 The legislative history of the Act indicates that the
Congress intended an "effects test" concept, as outlined in the
employment field by the Supreme Court in the cases of Griggs v.
Duke Power Co., 401 U.S. 424 (1971), and Albemarle Paper Co.
v. Moody, 422 U.S. 405 (1975), to be applicable to a creditor's
determination of creditworthiness. Go Back to Text
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