June 19, 1997

Kari Greathouse, VP, Information Services
Missouri Credit Union System
2055 Craigshire Drive
St. Louis, MO 63146-4009

You have asked whether a credit union must display an Equal Housing poster if it makes a signature loan that the member uses for home improvement purposes. The issue is whether a real estate related loan, as defined in §701.31 of NCUA Rules and Regulations, includes a signature loan that is used for home improvement purposes. As explained below, the answer is yes.

A federal credit union (FCU) is required to display an Equal Housing poster if it engages in real estate related lending. 12 C.F.R. §701.31(d)(2). A "real estate-related loan" is defined as "any loan for which application is made to finance or refinance the purchase, construction, improvement, repair, or maintenance of a dwelling." 12 C.F.R. §701.31(a)(3). The attached preamble to Section 701.31 states that a few commenters wanted the definition limited to loans over a certain amount and loans secured by a lien, but the Board rejected those limitations so that the regulation would be consistent with the Fair Housing Act of 1968, 42 U.S.C. §§3601 et seq. 44 Fed. Reg. 51191, 51192 (August 31, 1979). Therefore, an FCU that makes a loan for home improvement purposes must comply with Section 701.31, regardless of whether the loan is secured by a lien on the property.

Sincerely,

Sheila A. Albin
Associate General Counsel

GC/MFR:bhs
SSIC 3223
97-0533

Enclosure