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Published byKerrie Porter Modified over 9 years ago
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EQUAL CREDIT OPPORTUNITY ACT
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Applies to both consumer and non-consumer credit Prohibits discrimination on a prohibited basis regarding any aspect of a credit transaction, including: Application procedures (including discouraging applications) Information requirements Investigation procedures Standards of creditworthiness Terms of credit Furnishing of credit Administration of credit accounts Treatment of delinquent or slow accounts Collections SCOPE
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Prohibits both intentional and unintentional discrimination. Violation can occur without a conscious intent to discriminate. TYPES OF DISCRIMINATION
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A practice is discriminatory if: It constitutes disparate treatment or has a disparate impact on protected groups AND The credit union lacks a legitimate nondiscriminatory reason for its action, or the asserted reason is found to be a pretext for discrimination. Three types of discrimination: Overt Discrimination Disparate Treatment Disparate Impact TYPES OF DISCRIMINATION
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Sex Marital status Race Color National origin Age The receipt of protected income Exercise of legal rights under the consumer credit laws Religion PROTECTED CLASSES
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Sex Marital Status Spousal Information Childbearing Intentions or Capabilities Race, Religion or National Origin Age Income Credit History Monitoring Information LIMITS ON INFORMATION
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May not require the signature of an applicant’s spouse or any other person on a credit instrument where an applicant qualifies by him or herself May require the signature of a joint owner only on the instrument that enables you to reach the property in the event the applicant dies or is in default on the loan. May request a co-signer or a guarantor, but you cannot dictate who that person is. SIGNATURE RULES
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Loan applicants must affirmatively indicate their desire for joint credit at the time of application. Signatures on a promissory note may not be used to show intent to apply for joint credit. Signatures or initials on a credit application affirming applicants’ intent to apply for joint credit may be used to establish intent to apply for joint credit. The method used to establish intent must be distinct from the means used by individuals to affirm the accuracy of information. “Safe Harbor” model forms are available in Appendix B to Reg B. JOINT INTENT
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Timing Disposition: Incomplete Application Approval Counteroffer Withdrawal Denial NOTIFICATION OF ACTION TAKEN
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Must be in writing Given to at least the primary applicant Must contain the following items as applicable: A statement of the action taken. The name and address of the credit union. A statement of the ECOA nondiscrimination requirements The address for NCUA. Reasons for adverse action Can be combined with FCRA notice ADVERSE ACTION NOTICE
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May deliver Regulation B disclosures to consumers in electronic form, subject E-Sign rules. Certain disclosures must be provided with an on-line application Disclosures required on the application (for example, voluntary income disclosures) do not have to conform to ESIGN. E-SIGN
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Applicants have a right to their appraisals Notification of the right is required Provide appraisals upon request Special Rules for Federal Credit Unions APPRAISALS
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Hint..... 25 months RECORD RETENTION REQUIREMENTS
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Voluntary Privileged Self-corrective action is required Exceptions apply... of course. SELF-TESTING
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