Knowledge Tree
Regulation B
Facts (25)
Sources
Fair Lending Report of the Consumer Financial Protection Bureau federalregister.gov Jul 2, 2024 19 facts
measurementThe Agricultural Marketing Service (AMS), the Securities and Exchange Commission (SEC), and the Small Business Administration (SBA) reported receiving zero complaints based on the Equal Credit Opportunity Act (ECOA) or Regulation B in 2023.
claimFinancing arrangements for franchisees, whether obtained directly from a franchisor or from third-party finance companies, are classified as "credit" and "business credit" under the Equal Credit Opportunity Act (ECOA) and Regulation B.
claimCreditors subject to the Equal Credit Opportunity Act (ECOA) and Regulation B may violate these laws if they use data from data brokers to engage in discriminatory targeting, steering, redlining, or other forms of unlawful discrimination.
claimThe FFIEC agencies reported that the most frequently cited violations during examinations for compliance with the Equal Credit Opportunity Act (ECOA) and Regulation B in 2023 involved discrimination on a prohibited basis in a credit transaction and improperly requiring the signature of an applicant's spouse or other person, as defined in 12 CFR 1002.4 and 1002.7(d)(1).
claimThe National Credit Union Administration (NCUA) and the Consumer Financial Protection Bureau (CFPB) reported violations of 12 CFR 1002.4 and 1002.7(d)(1) regarding discrimination on a prohibited basis and improper signature requirements in 2023.
accountThe Federal Trade Commission (FTC) and the State of Wisconsin brought an enforcement action in Federal court against Rhinelander (a Wisconsin auto dealer group), its current and former owners, and general manager Daniel Towne in 2023, alleging violations of the Equal Credit Opportunity Act (ECOA) and Regulation B by discriminating against American Indian consumers through higher financing costs and fees.
claimUnder 12 CFR 1002.13(a)(1) and (b), creditors are required to request and obtain information regarding an applicant's ethnicity or race for monitoring purposes.
claimFinancial institutions subject to the Equal Credit Opportunity Act (ECOA) and Regulation B are prohibited from using fraud detection screens, policies, or procedures as a justification to violate or circumvent fair lending laws.
claimThe Farm Credit Administration (FCA) cited failures to request and collect information for monitoring purposes as a violation of 12 CFR 1002.13 in 2023.
claimDiscrimination on a prohibited basis violates the Equal Credit Opportunity Act (ECOA) and Regulation B when it occurs in any aspect of a credit transaction, including practices that entities may characterize as related to fraud detection.
claimUnder the Equal Credit Opportunity Act (ECOA) and Regulation B, lenders must provide a statement of specific and accurate reasons when taking adverse action against an applicant and cannot simply use CFPB sample adverse action forms if those forms do not reflect the actual reason for the denial of credit.
claimUnder 12 CFR 1002.9(a)(1)(i), (a)(2), (b)(1), (b)(2), and (c), creditors are required to provide notice to an applicant within 30 days of receiving a completed application regarding approval, counteroffer, or adverse action, and must provide sufficient information including specific reasons for any adverse action taken.
claimThe Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) reported violations of 12 CFR 1002.5(b), 1002.5(c), and 1002.5(d) in 2023, which involve prohibited inquiries about an applicant's race, color, religion, national origin, sex, marital status, or income sources like alimony and child support.
claimThe Consumer Financial Protection Bureau (CFPB) reported violations of 12 CFR 1002.6(b)(2) and (5) in 2023, which concern the improper evaluation of age and receipt of public assistance in a credit transaction.
measurementIn 2023, federal agencies and the Consumer Financial Protection Bureau collectively reported citing 189 institutions for violations of the Equal Credit Opportunity Act (ECOA) and/or Regulation B.
claimThe Consumer Financial Protection Bureau's 30th edition of 'Supervisory Highlights' reported that mortgage lenders violated the Equal Credit Opportunity Act (ECOA) and Regulation B by discriminating in the granting of pricing exceptions based on race, national origin, sex, and age.
claimOn June 5, 2023, the CFPB published a document affirming that the Equal Credit Opportunity Act (ECOA) and Regulation B apply to franchisees seeking credit to finance their businesses.
claimThe Consumer Financial Protection Bureau assesses whether lenders comply with the adverse action notice requirements of the Equal Credit Opportunity Act (ECOA) and Regulation B, and whether lenders maintain policies that unlawfully exclude property based on geography, exclude certain types of income, or treat criminal history in an unlawful manner.
claimThe Consumer Financial Protection Bureau (CFPB) provides informal staff guidance to financial institutions and service providers regarding statutes and rules it implements, such as the Equal Credit Opportunity Act (ECOA), Regulation B, the Home Mortgage Disclosure Act (HMDA), and Regulation C, via its Regulation Inquiries platform.
Fair Lending Enforcement Program - Department of Justice justice.gov 3 facts
claimRegulation B requires lenders to collect data on the race, ethnicity, and sex of applicants for home mortgage loans, a practice that the Department of Justice states has not led to discriminatory or improper use of the information.
referenceRegulation B, promulgated by the Federal Reserve Board to implement the Equal Credit Opportunity Act (ECOA), prohibits lenders from inquiring about the race, color, sex, religion, or national origin of applicants for business loans and other types of non-mortgage loans.
perspectiveThe Department of Justice argues that Regulation B should be changed to permit creditors to collect data on the race, ethnicity, and sex of business loan applicants, as this data would allow institutions to monitor their own performance and provide regulators with the tools needed to identify and solve discriminatory lending problems.
The Fair Lending Implications of Targeted, Internet Marketing consumercomplianceoutlook.org 3 facts
claimRegulation B prohibits creditors from making any oral or written statement in advertising or other communications that would discourage a reasonable person from applying for credit based on a protected characteristic.
referenceThe Equal Credit Opportunity Act (ECOA) and Regulation B prohibit discrimination in any aspect of a credit transaction.
quoteRegulation B states: “[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.”