Ecoa Flashcards
Econ covers
All types of credit
ECOA includes the following prohibited bases
Race Age Marital Status Religion National origin Color
RAMRNC
Also receipt of public service assistance
ECOA covers what type of credit evaluation methods
All judgements and credit scoring
Exceptions to ECOA include
Public utilities credit
Incidental credit ( less than 4 installments, not a credit card account)
Government credit
Securities credit
PIGs
True or false. All aspects of credit transaction are covered under ECOA. Like
True
ECOA three step process
Consumer prices disproportionate adverse effect
Creditor proves manifest relationship between the practice and creditworthiness
Consumer show alternative policy or practice that net the same result without disproportionate adverse effect
Creditors cannot discourage applicants by
Making statements to discourage some one from applying
Definition of an application
Oral or written request for credit
Information entered into a computer system
An inquiry when creditor evaluates the information and decided to grant or decline the request
Requests for written preapprovals
A completed application is one where
Information that it regularly receives to make a credit decision has been sent
If information has not been sent, the creditor must make a good effort to receive it
Disclosures must be in a form that the applicant can keep except disclosures for
Monitoring information
Alimony or child support
Can disclosures be made in any language
Yes provided English disclosures are available upon request
Can marital status be a basis to grant credit
No but it can be used to consider rights and remedies.
True or false
Married and unmarried applicants can be underwritten using different standards
False
Should a creditor determine if a person is old enough to enter a contract
Yes
A creditor may consider age as it relaxers to another pertinent element of credit worthiness such as time until retirement if what type of underwriting is used
Judgements
For age a creditor may age as a predictor indicator if
The system is empirically derives and demonstrably and statistically sound
Protected income under ECOA means
May not consider if income from a public assistance But May consider length of Time the income Will be received
Cannot discount Part time income Pensions Retirement benefits Alimony
T/F. Child bearing assumptions can be used to determine income
False
T/F
May consider if the applicant has a phone in their name
False, but can consider if there is a phone at the residence
Can immigration status be considered as part of the credit decision
Yes
For qualified applicants, the creditor may not require signature of spouse if
Applicant qualifies alone
If the applicant does not qualify alone, the can ask for a co-signer or guarantor but still may not require the spouse
The times a creditor may request the signature of the spouse are
Property in community property state
Applicant relies on property owned by another
Are business purpose loans subject to the same spousal signature rules
Yes
To comply with ECOA spousal rules compliance should include
A review of polices
Training to staff
Monitoring and auditing programs
For existing open end accounts, unless the applicant is unwilling to pay a creditor may not do the following based on applicants age, retirement, marital status
Require reapplication
Change terms of the account
Terminate an open end account
Can a creditor use a prohibited basis to trigger a request for updates information
No
The folk constitute a adverse action
Refusal to grant credit on requested terms
Termination of an account
Unfavorable change in terms with an account
Denial of an increase request
A counter offer that is rejected by the applicant
The following do not constitute a adverse action
Agreed upon change in terms
Forbearance activity
Lender does not offer that product
Credit is prohibited by law
Counter offer is accepted
Applicants must be notified within 30 days of
Receiving a completed application
30 days after taking adverse action on incomplete application
30 days after taking adverse on an account
90 days after a counter offer is not accepted
For multiple applications, notice should be given to
The primary applicant
Notification content must contain
Statement of action
ECOA notice
Name and address of creditor
Name and address of federal agency that administers creditors compliance with ECOA
SCENN
For business credit applications, the notice may be give. Orally or in writing at the time
The adverse action is taken
However if orally, creditor must inform applicant they can get a copy of it in 30 days
For business with gross revenues more than a million the preceding year the bank must
Notify the applicant in a reasonable time
Provide written statement within a reasonable time
Provide written request in 60 days if borrower requests
Notice of incompleteness must be sent
30 days of receipt of applicantion
It should specify the information needed
Designate a reasonable time to provide the information
Let applicant know. If info is not received no further action will be taken
Applicant must get a copy of evaluation if loan is a
First lien on a dwelling
Appraisals must be given within_______ days prior to consummation
3 unless borrower waives right and wants it at consummation or account opening
Note waivers must be in writing and received 3 days before consumation
If joint applicants, information must be transmitted to the credit bureau agency in a way that
Allows access to the information in each name of each spouse
Applicants must be retained do
25 months from the notication of action taken. The following items should be maintained
Application
Notice of action taken
Any statements from applicant alleging violation of reg b
