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Federal R eserve Bank
OF DALLAS
ROBERT

D. M C T E E R , J R .

P R E S ID E N T
AND

C H IE F E X E C U T IV E

O F F IC E R

April 26, 1991

DALLAS, TEXAS 75222

Notice 91-33
TO:

The Chief Executive Officer of each
member bank and others concerned in
the Eleventh Federal Reserve District
SUBJECT
Official Staff Commentary on Regulation B
(Equal Credit Opportunity)
DETAILS

The Federal Reserve Board has published in final form revisions to
the Official Staff Commentary on Regulation B (Equal Credit Opportunity). The
commentary applies and interprets the requirements of Regulation B and is a
substitute for individual staff interpretations. The revisions address
notification of adverse action and a state law preemption determination.
The revisions became effective April 1, 1991.
ATTACHMENT
A copy of the B o a r d ’s notice is attached.
MORE INFORMATION
Questions concerning the B o a r d ’s revisions should be addressed to
W. Arthur Tribble at (214) 744-7479.
For additional copies of this B a n k ’s
notice, please contact the Public Affairs Department at (214) 651-6289.
Sincerely yours,

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas:
Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162,
Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

FEDERAL RESERVE SYSTEM
12 CFR Part 202
[Reg. B; EC-1]
EQUAL CREDIT OPPORTUNITY

Update to Official Staff Commentary

AGENCY:

Board of Governors of the Federal Reserve System.

ACTION:

Final official staff interpretation.

SUMMARY:

The Board is publishing in final form revisions to the

official staff commentary to Regulation B (Equal Credit
Opportunity).

The commentary applies and interprets the

requirements of Regulation B and is a substitute for individual
staff interpretations of the regulation.

The revisions address

notification of adverse action and a state law preemption
determination.
EFFECTIVE DATE:

April 1, 1991.

FOR FURTHER INFORMATION CONTACT:

In the Division of Consumer and

Community Affairs, Adrienne D. Hurt, Senior Attorney, or Jane
Ahrens, Staff Attorney, at (202) 452-2412; for the hearing
impaired only. contact Dorothea Thompson, Telecommunications
Device for the Deaf (TDD), at (202) 452-3544, Board of Governors
of the Federal Reserve System, Washington, DC 20551.

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SUPPLEMENTARY INFORMATION:
(1) General
The Equal Credit Opportunity Act (ECOA), 15 U.S.C. §16911691f, makes it unlawful for creditors to discriminate in any
aspect of a credit transaction on the basis of race, color,
religion, national origin, sex, marital status, age, receipt of
public assistance, or the exercise of rights under the Consumer
Credit Protection Act.

This statute is implemented by the

Board's Regulation B (12 CFR Part 202).

The Board also has an

official staff commentary (12 CFR Part 202 (Supp. I)) that
interprets the regulation.

The commentary provides general

guidance to creditors in applying the regulation to various
credit transactions, and is updated periodically to address
significant questions that arise.
On November 28, 1990, the Board published for comment a
proposed update to the commentary.

(55 Fed. Reg. 49391)

This

notice contains in final form the 1990-91 update to the official
staff commentary on Regulation B.
(2) Revisions
Section 202.2 - Definitions
2(c) Adverse action
Comment 2(c )(2 )(ii )-2 is added to clarify the Board's
long-standing position that a notice of adverse action need not
be provided in instances where a creditor takes action regarding
a current delinquency or default on an account -- that is, a
delinquency or default that has not been cured by the time a

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creditor takes action on an account.

Notification generally is

required, however, for action based on a past delinquency or
default that may have previously existed but that no longer
continues.
Section 202.11 - Relation to State Law
11(a)

Inconsistent state laws
Comment 11(a)-2 is added to reflect a preemption

determination relating to Ohio law that took effect on July 23,
1990 (55 FR 29566).
List of Subjects In 12 CFR Part 202
Banks; Banking; Civil rights; Consumer protection; Credit;
Federal Reserve System; Marital status discrimination; Minority
groups; Penalties; Religious discrimination; Sex discrimination;
Women.
Pursuant to authority granted in section 703 of the Equal
Credit Opportunity Act (15 U.S.C. §1691b), the Board is amending
the official staff commentary to Regulation B (12 CFR 202 Supp.
I) as follows:
1.

The authority citation for Part 202 continues to read as

follows:
AUTHORITY:
2.

15 U.S.C.

§1691-1691f

In section 202.2, comment 2(c )(2)(ii)-2 is added to read as

follows:

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Section 202.2 —

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Definitions

2(c) Adverse action.
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Paragraph 2(c)(2)(ii)
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2. Current delinquency or default.

The term adverse

action does not include a creditor's termination of an account
when the accountholder is currently in default or delinquent on
that account.

Notification in accordance with section 202.9 of

the regulation generally is required, however, if the creditor's
action is based on a past delinquency or default on the account.
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3. In section 202.11, comment ll(a)-2 is added to read as
follows:
Section 202.11 -11(a)

Relation to State Law

Inconsistent state laws.
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Preemption determination -- Ohio.

Effective July 23,

1990, the Board has determined that the following provision in
the state law of Ohio is preempted by the federal law:
•

Section 4112.021(B)(1) -- Unlawful discriminatory
practices in credit transactions.

This provision is

preempted to the extent that it bars asking or favorably
considering the age of an elderly applicant; prohibits the
consideration of age in a credit scoring system; permits
without limitation the consideration of age in real estate

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transactions; and limits the consideration of age in
special-purpose credit programs to certain governmentsponsored programs identified in the state law.
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Board of Governors of the Federal Reserve System,
April 1, 1991.
(signed) William W. Wiles
Secretary of the Board


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102