ECOA Reg B

andrea.browne
Mind Map by andrea.browne, updated more than 1 year ago
andrea.browne
Created by andrea.browne about 5 years ago
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ECOA Reg B

Resource summary

ECOA Reg B
1 Equal credit Opportunity Act
1.1 Redlining
1.1.1 Where creditors refuse to make loans in certain neighborhoods due to the personal favorable characteristics of the residents
1.2 Reverse Redlining
1.2.1 Predatory lenders would target elderly, immigrant, and minority populations to make risky loans that included oppressive lending terms
2 Eliminate discriminatory treatment of credit applicants
3 Promote the availability of credit to all creditworthy applicants regardless of race, color, religion, national origin, sex, marital status, or age
4 Prohibits Credit Decisions based on income from public assistance
5 Terms Related to ECOA
5.1 Adverse Action, A refusal to increase the amount of credit available to an applicant who had made an application for an increase
5.1.1 Discriminate, To treat an applicant less favorably than other applicants
5.1.1.1 Discouragement, An oral or written statement, communicated to applicants in advertising or by any other means that discourages an applicant from applying for credit on a prohibated basis
5.1.1.1.1 Prohibited Basis, Prohibited bases means race, color religion, national origin, sex, marital status or age; the fact that all or part of the applicant's income derives from any public assistance program; or the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act or any state law upon with an exemption has been granted by the CFPB
5.1.1.1.1.1 Self-Testing, Any program or study conducted by a creditor that is designed to evaluate the creditor's compliance with ECOA and Reg B
5.1.1.1.1.1.1 Tester, An individual who poses as a loan applicant to test a creditor's fair lending policies and practices
6 Exceptions
6.1 Inquires regarding race, ethnicity, sex, marital status, and age are required for purposes of federal programs that monitor compliance with fair lending laws. i.e. HMDA
6.1.1 Creditors may obtain information about an applicant's protected characteristics in order to determine the applicant's eligibity for special purpose credit.
6.1.2 If the applicant does not wish to provide this information the loan orginator must make there best judgement
7 Penalties
7.1 VIolations can result in civil penalties of $5,000 per day, where a pattern of misconduct $25,000 are permitted
7.1.1 Punitive damages are limited to $10,000 in individual actions and to the lesser of $500,000 or 1% of the creditors net worth
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