ECOA Flashcards
What are the protected classes on ECOA?
Age, Race, Color, Sex, National Origin, Marital Status, and Religion
True or False:
A lender may factor receipt of public assistance into is credit decision for a mortgage application.
FALSE
When creditors refuse to make loans in certain neighborhoods due to the personal characteristics of the residents
Redlining (i.e. White Neighborhoods and Black Neighborhoods)
When predatory lenders target neighborhoods with elderly, immigrant, and minority populations to make risky loans that included oppressive lending terms.
Reverse Redlining
Collection of ECOA’s requirements are referred to as:
Regulation B
The primary agency responsible for enforcing Reg B
ECOA
True or False:
Unlike RESPA and TILA, ECOA applies to loans for business, commercial, and agricultural use
TRUE
A creditor’s refusal to offer credit in the amount or according to the terms requested by a loan applicant
Adverse Action
ECOA defines “elderly” as
62 years or older
Utilizing a factor, value, or weight that is less favorable to elderly applicants than warranted by the creditor’s experience, or that is less favorable than the factor, value, or weight assigned to people who are non-elderly and are most favored by a creditor on the basis of age.
Negative Factor or Value
When must notice of adverse action be supplied to the applicant?
Within 30 days of rendering a decision
What additional information must be provided with a notice of adverse action?
Statement that ECOA prohibits discrimination
Name and address of creditor
Name of agency that enforces compliance (CFPB)
Indication of whether decision was based on credit report
Information on the credit reporting agency
This notice must state the information needed, set a reasonable time for submission of the information, and advise the applicant that failure to provide the information will result in no further consideration of the application
Notice of Incompleteness
What valuation disclosures must be provided to an applicant under Reg B?
- Notice of right to receive copy of appraisal (3 business days after application)
- A copy of all appraisals (Promptly after appraisal or at least 3 days prior to consummation)
True or False:
Declined and withdrawn applications still require a copy of the appraisal
TRUE; however the deadline is extended to 30 days upon action
What is the retention requirement for notice of action taken or incompleteness?
25 months
When a creditor adopts a neutral policy without discriminatory intent, and the policy has a discriminatory impact
e.g. Limiting transaction to home value of $250k or more may exclude certain protected classes
Disparate Impact
True or False:
It is illegal to ask an applicant about his/her national origin if it is not related to collecting information for monitoring under HMDA
TRUE
True or False:
Creditors are prohibited from requiring the signature of an applicant’s spouse, or of another person who is not a joint applicant, if the individual qualifies on his or her own for credit
TRUE
True or False:
Submission of a joint financial statement or other evidence of jointly-held assets may be considered an application for joint credit.
FALSE
Community Property States may require
Cosigning of spouse
Reg B Punitive Damages are
$10k for individual actions
The lesser of $500,000 or 1% of a creditor’s net worth in class actions
Statute of Limitations for ECOA violations
Five Years
