Free NMLS Study Guide
REGULATION B
1002.1 Authority,
scope and purpose.
(a) Authority and scope. This
part, known as Regulation B, is issued by the Bureau of Consumer Financial
Protection (Bureau) 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 part applies to
all persons who are creditors, as defined in § 1002.2(l), other than a
person excluded from coverage of this part by section 1029 of the Consumer
Financial Protection Act of 2010, title X of the Dodd-Frank Wall Street Reform
and Consumer Protection Act, Public Law 111--203, 124 Stat. 1376. Information
collection requirements contained in this part 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. 3170--0013.
(b) Purpose. The
purpose of this part 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; 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.
§ 1002.1]
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.
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.
[Codified to 12 C.F.R. § 1002.8]
§ 1002.9 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.
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.
§ 1002.12 Record
retention.
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:
B) The
statement of specific reasons for adverse action; and
(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 part, 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 part, or if it has been served with notice of an action
filed pursuant to section 706 of the Act and § 1002.16 of this part. 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.
(i) Ethnicity, and
race using either;
(A) For ethnicity, the aggregate categories Hispanic
or Latino, and not Hispanic or Latino; and for race, the aggregate categories
American Indian or Alaska Native, Asian, Black or African American, Native
Hawaiian or Other Pacific Islander, and White; or
(B) The categories and subcategories for the
collection of ethnicity and race set forth in appendix B to 12 CFR part 1003.
[Codified to 12 C.F.R.
1002.13]
§ 1002.14 Rules
on providing appraisals and other valuations.
(a) Providing appraisals and other
valuations. (1) In general. A creditor
shall provide an applicant a copy of all appraisals and other written
valuations developed in connection with an application for credit that is to be
secured by a first lien on a dwelling. A creditor shall provide a copy of each
such appraisal or other written valuation promptly upon completion, or three
business days prior to consummation of the transaction (for closed-end credit)
or account opening (for open-end credit), whichever is earlier. An applicant
may waive the timing requirement in this paragraph (a)(1) and agree to receive
any copy at or before consummation or account opening, except where otherwise
prohibited by law. Any such waiver must be obtained at least three business
days prior to consummation or account opening, unless the waiver pertains
solely to the applicant's receipt of a copy of an appraisal or other written
valuation that contains only clerical changes from a previous version of the
appraisal or other written valuation provided to the applicant three or more
business days prior to consummation or account opening. If the applicant
provides a waiver and the transaction is not consummated or the account is not
opened, the creditor must provide these copies no later than 30 days after the
creditor determines consummation will not occur or the account will not be
opened.
(2) Disclosure. For applications
subject to paragraph (a)(1) of this section, a creditor shall mail or deliver
to an applicant, not later than the third business day after the creditor
receives an application for credit that is to be secured by a first lien on a
dwelling, a notice in writing of the applicant's right to receive a copy of all
written appraisals developed in connection with the application. In the case of
an application for credit that is not to be secured by a first lien on a
dwelling at the time of application, if the creditor later determines the
credit will be secured by a first lien on a dwelling, the creditor shall mail
or deliver the same notice in writing not later than the third business day
after the creditor determines that the loan is to be secured by a first lien on
a dwelling.
(3) Reimbursement. A
creditor shall not charge an applicant for providing a copy of appraisals and
other written valuations as required under this section, but may requireapplicants to pay a reasonable
fee to reimburse the creditor for the cost of the appraisal or other written
valuation unless otherwise provided by law.
1002.16 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 part 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, National
Credit Union Administration, Surface Transportation Board, Civil Aeronautics
Board, Secretary of Agriculture, Farm Credit Administration, Securities and
Exchange Commission, Small Business Administration, Secretary of
Transportation, and Bureau of Consumer Financial Protection.
(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 part 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 part 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. Section 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) of the Act, a civil action under the Act or this part 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
five 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 five
years after the alleged violation.
(3) If an agency responsible for administrative
enforcement is unable to obtain compliance with the Act or this part, it may
refer the matter to the Attorney General of the United States. If the Bureau,
the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the
Board of Governors of the Federal Reserve System, 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 part, 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.
(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.
