The Equal Credit Opportunity Act and its implementing rule, Regulation B, prohibit any creditor from discriminating based on sex or marital status, among other protected statuses. All the federal banking agencies are involved in examining compliance with Regulation B; however, the Dodd-Frank Act transferred authority over implementation and interpretation from the Federal Reserve to the Consumer Financial Protection Bureau. Since the Dodd-Frank Act, we have seen a renewed emphasis on Regulation B during compliance examinations, and in many of these cases the primary issue has been violations of the spousal signature provisions.
Marital Status Rules Under Regulation B -
When an applicant applies for individual credit, a lender generally may not ask about the applicant’s marital status. There are two exceptions to this rule: (1) if the credit transaction will be secured; or (2) if the applicant either resides in a community property state or supports the debt with assets located in a community property state. A lender is free to inquire about marital status when there is a request for joint credit, regardless of whether the credit will be secured or unsecured.
Originally published in Bank News - December 2014.
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