Term
| What entity approved the collection of ECOA related documents? |
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Definition
| Office of Management and Budget |
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Term
| Who are the protected applicants under ECOA? |
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Definition
race
color
religion
national origin
sex
marital status
age
receipt of public income
the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act |
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Term
| What does ECOA require other than discrimination based on the 9 factors? |
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Definition
Notice of adverse action
Report credit of both spouses on an account
Retain records of credit applications
Collect info about the applicant's race and other personal characteristics for certain dwelling related loans
Provide applicants with copies of appraisal reports. |
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Term
| What does "adverse action" include? |
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Definition
1. A refusal to grant credit.
2. A termination of an account or an unfavorable change in the terms of the account.
3. A refusal to increase the amount of credit available to an applicant who has made an application for an increase. |
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Term
| What does the term "adverse action" not include? |
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Definition
1. A change in the terms of an account agreed to by an applicant
2. Any action related to inactivitiy or default of an account.
3. A refusal to extend credit because the type of plan is not offered. |
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Term
| Define "discouragement" under ECOA. (memorize the answer) |
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Definition
| A creditor shall not make any oral or written statement, in advertising or otherwise, to applicants or prospective applicants that would discourage on a prohibited basis a reasonable person from making or pursuing an application. |
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Term
| What's the deal with foreign language disclosures? |
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Definition
| They may be made in languages other than English, provided that they are also available in English upon request. |
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Term
| Under ECOA (not HMDA), when can a creditor obtain information about the race, color, religion, natural origin, or sex of an applicant? |
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Definition
When doing a self-test that meets the requirements of section 202.15 of this law.
But the creditor must disclose orally or in writing that this info is not required and that the creditor is requesting the info to monitor its compliance with ECOA. |
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Term
| What can be requested about sex in non-self test situations? |
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Definition
| If notified that it is optional, the application can ask for a title like Ms. Miss Mr, etc. |
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Term
| What is the general rule in regards to asking about a spouse or former spouse? What are permitted inquiries? |
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Definition
General Rule - it is not allowed.
Permissible when - 1. Spouse is permitted to use the account. 2. Spouse is contractually liable on the account. 3. Spouse's income is relied upon. 4. Applicant resides in a community property state. 5. Applicant is relying on alimony, child support, or separate maintenance from a spouse or former spouse. |
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Term
| Can a creditor inquire about the children of an applicant? |
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Definition
| Yes. A creditor may inquire about the number and ages of an applicant's dependents or about dependent related financial obligations, as long as it is without regard to sex, marital status, etc. |
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Term
| What about permanent residency and immigration? |
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Definition
| A creditor may inquire about permanent residency and immigration status of any person involved in the credit transaction. |
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Term
| When can a creditor use age as a predictive variable in assigning risk to an application? |
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Definition
| If the credit scoring system is sound, a creditor may use age as a predictive variable as long as the age of an elderly applicant is not assigned a negative value. |
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Term
| What can a creditor take into account in regards to telephone listings? |
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Definition
| A creditor shall not take into account whether there is a telephone listing in the name of an applicant for consumer credit, but may take into account whether there is a telephone in the applicant's residence. |
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Term
| When can a creditor require a reapplication? |
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Definition
As a general rule they cannot.
But when there is a change of marital status, and the spouse's income is being considered, then reapplication can be required. |
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Term
| When must a creditor notify an applicant of adverse action? (four different ways) |
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Definition
1. 30 days after taking a completed application.
2. 30 days after taking adverse action on an incomplete application.
3. 30 days after taking an adverse action on an existing account.
4. 90 days after notifying the applicant of a counteroffer if the applicant does not accept or use the credit offered. |
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Term
| How must the statement of adverse action be delivered? What must the adverse action include? |
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Definition
It must be in writing and contain a statement of the action taken. It must also contain the name and address of the creditor, a statement of the provisions of section 701(a) of the Act, the name and address of the federal agency that administers compliance, and either:
1. A statement of reasons of the action taken (OR)
2. A disclosure of the applicant's right to a statement within 30 days if they request the statement within 60 days of receipt of the notice. |
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Term
| What should the requested disclosure of the specific reasons for adverse action taken include? |
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Definition
| Name, address, and telephone number of a person or office from which the statement of reasons can be obtained. |
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Term
| If the creditor chooses to provide the reasons for adverse action orally what else must be disclosed? |
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Definition
| The applicant's right to have them confirmed in writing within 30 days of receiving the applicant's written request for confirmation. |
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Term
| A creditor may retain in its files information that is prohibited by ECOA if the info was obtained through what avenues? |
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Definition
1. From any source prior to 3/23/1977
2. From consumer reporting agencies, an applicant, or others without the specific request of the creditor. (Basically, if they got info they didn't ask for)
3. As required to monitor compliance with ECOA. |
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Term
| How long must creditors preserve records? |
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Definition
For 25 months for residential applications
For 12 months for business credit.
AFTER the date a creditor notifies an applicant of action taken. |
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Term
| What information must a creditor preserve to be in compliance with ECOA? |
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Definition
1. Any info concerning the adverse action.
2. Any written statement submitted by the application alleging violation of this Act. |
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Term
| If a complaint is filed, for how long must the creditor retain information? |
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Definition
| Until the final disposition of the matter, unless an earlier time is allowed by the appropriate agency or court order. |
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Term
| In regards to prescreened solicitations, what must the creditor retain? |
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Definition
1. The text of any prescreened solicitation
2. The list of criteria the creditor used to select potential receipients of the solicitation
3. Anything related to complaints (formal or informal) about the solicitation. |
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Term
| What information about an applicant is to be requested (but not required) by a creditor? |
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Definition
1. Ethnicity (Hispanic or Latino/not Hispanic or Latino) and Race (American Indian or Alaska Native, Asian, Black or African American, Native Hawaiian or Other Pacific Islander, and White
2. Sex
3. Marital status (married, unmarried, and separated)
4. Age |
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Term
| What is defined as dwelling according to ECOA? |
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Definition
| Residential structure that contains one to four units, whether or not that structure is attached to real property. Including a condo, coop, and a mobile or other manufactured home. |
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Term
| What must a creditor do if the applicant chooses not to disclose his or her ethnicity, race, and sex? |
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Definition
| note that the applicant chooses not to provide the info and then note the ethnicity, race, and sex and the basis of visual observation. (note: YES, this is listed under ECOA law as well.) |
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Term
| When must a creditor provide a copy of the appraisal report? |
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Definition
Either:
1. Routinely whether or not credit is granted or denied or the application is withdrawn. OR
2. Upon written request. |
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Term
| If a creditor chooses to provide an appraisal report only upon request, what must it do? |
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Definition
| Notify the applicant in writing of the right to receive a copy of the report. This notification must be in writing and give the creditor's mailing address. |
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Term
| When must the appraisal report notice be given? |
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Definition
| At any time during the application process, but no later than when the creditor provides notice of action taken. |
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Term
| When must a creditor deliver a copy of the appraisal report to the applicant? |
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Definition
| Promptly (generally within 30 days) after the creditor receives the applicant's request, receives the report, or receives reimbursement from the applicant for the report, whichever is last to occur. |
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Term
| How long does the applicant have to request an appraisal report? |
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Definition
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Term
| Which creditors are not subject to laws regarding appraisals? |
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Definition
| Any creditor that is subject to the regulations of the National Credit Union Administration. |
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Term
| What is the purpose of a self-test under ECOA? |
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Definition
| To see if the creditor is submitting to the standards of ECOA. |
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Term
| In regards to self-tests, when is corrective action generally required? |
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Definition
| When the self-test shows that it is more likely than not that a violation occurred, even though no violation has been formally adjudicated. |
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Term
| What are the penalties for non-compliance with ECOA? |
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Definition
| $10,000 in individual actions, and the lesser of $500,000 or 1% of the creditor's net worth in class actions. |
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Term
| For how long can a civil action be filed? |
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Definition
| Within two years after the date of the occurrence of the violation |
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Term
| What are the possible reasons listed for an adverse action taken. |
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Definition
| 1. Credit application incomplete 2. Insufficient number of credit references provided. 3. Unacceptable type of credit references provided. 4. Unable to verify credit references. 5. Temporary or irregular employment. 6. Unable to verify employment. 7. Length of employment. 8. Income insufficient for amount of credit requested. 9. Excessive obligations in relation to income. 10. Unable to verify income. 11. Length of residence. 12. Temporary residence. 13. Unable to verify residence. 14. No credit file. 15. Limited credit experience. 16. Poor credit performance with us. 17. Delinquent past or present credit obligations with others. 18. Collection action or judgment. 19. Garnishment or attachment. 20. Foreclosure or repossession. 21. Bankruptcy. 22. Number of recent inquiries on credit bureau report. 23. Value or type of collateral not sufficient. 24. Other |
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