The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
F ederal reserve Bank DALLAS. TEXAS of Dallas 75222 C ircular No. 77-89 August 18, 1977 REGULATION B—EQUAL CREDIT OPPORTUNITY Fe d e ra l o r State Special P u r p o s e C r e d i t P ro g ra m s TO ALL BANKS, OTHER CREDITORS, AND OTHERS CONCERNED IN THE ELEVENTH FEDERAL RESERVE DISTRICT: T h e Board of G o v e rn o rs of th e F e d e ra l R e s e r v e System has is s u e d an in te r p r e ta tio n of the p r o v is io n of its R egulation B— Equal C re d it O p p o r tu n it y —d e a lin g with F e d e ra l o r State sp ec ia l p u r p o s e c r e d i t p r o g ra m s . T h e Equal C r e d it O p p o rtu n ity Act a n d R egulation B p r o v id e th a t it is not illegal to d e n y c r e d it solely b e c a u s e the a p p lic a n t does not qualify for c r e d i t " e x p r e s s l y a u th o riz e d by F ederal or State law" for th e b e n efit of an econom ically d is a d v a n ta g e d c la s s of p e r s o n s . An e x am p le of s u c h a sp ecial p u r p o s e c r e d i t p r o g r a m would b e one d e s ig n e d to b e n efit econom ically d is a d v a n ta g e d A m e ric an In d ia n s . It is not illegal to e x c lu d e n onIndian a p p lic a n ts for c r e d i t u n d e r s u c h a p r o g r a m . T h e i n te r p r e ta tio n , a copy of w h ic h is e n c lo se d , s ta te s th a t a c r e d i t p r o g r a m is c o n s id e r e d to be " e x p r e s s l y a u th o riz e d by Federal or State law" if it is a u th o r iz e d b y th e te rm s of a F e d e ra l o r State s ta tu te o r b y a re g u la tio n lawfully p ro m u lg a te d by th e Federal o r State a g e n c y r e s p o n s ib le for implementing the p r o g r a m . When it p ro p o s e d (May 10, 1977) the in te r p r e ta tio n now a d o p te d , the Board a n n o u n c e d th a t in its opinion d e te rm in a tio n s w h e th e r a F ederal o r State special p u r p o s e c r e d i t p r o g r a m b e n e fits an econom ically d i s a d v a n ta g e d c la s s of p e r s o n s a r e b e s t made b y th e a g e n c y c h a r g e d with th e a d m in is tra tio n of th e loan p r o g r a m . In ta k in g final a c tio n , th e Board a d d e d th a t it is th e r e s p o n s i bility of go v e rn m e n ta l a g e n c ie s o p e r a tin g special p u r p o s e loan p ro g r a m s to b e s u r e t h e i r re g u la tio n s a r e c o n s is te n t w ith r e le v a n t State a n d F ederal Banks and others are encouraged to use the following incoming WATS numbers in contacting this Bank: 1-800-492-4403 (intrastate) and 1-800-527-4970 (interstate). For calls placed locally, please use 651 plus the extention referred to above. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - la w s. C r e d ito r s will not violate R egulation B b y com plying with State or Fe d e ra l special p u r p o s e loan p r o g r a m laws. U n d e r C i r c u l a r No. 77-82, d a te d J u ly 25, 1977, an i n t e r p r e t a tion of R egulation B w as f o r w a r d e d invo lving "State Laws S etting a Differ e n t Age of Majority fo r M arrie d a n d U n m a rrie d P e r s o n s . " T h e states r e f e r r e d to in o u r c i r c u l a r s h o u ld ha ve b e e n Alabama a n d N e b ra s k a in stead of Alabama a n d N evad a. Any q u e s tio n s r e g a r d i n g R egulation B sh o u ld be d ir e c te d to the C o n su m e r A ffairs section of o u r Examination D e p a rtm e n t, Ext. 6171. S in c e re ly y o u r s , R obert H . Boykin F ir s t Vice P r e s i d e n t E n c lo su re BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM EQUAL CREDIT OPPORTUNITY IN T E R P R E T A T IO N O F R E G U L A T IO N B SECTION 202.801 — SPECIAL PURPOSE CREDIT PROGRAM MAY BE AUTHORIZED BY LAW OR LAW FULLY PROM ULGATED REGULATION. PA RTICIPATING CREDITORS WILL N O T VIOLATE REGULATION B BY COM PLYING W ITH REGULATIONS IM PLE M EN TIN G SPECIAL PURPOSE CR ED IT PROGRAMS. (b) It is the responsibility of the administering agency to ensure that implementing regulations are consistent with applicable Federal and State law. A creditor participating in a loan program ex pressly authorized by Federal or State law will not violate Regulation B by complying in good faith with the law authorizing a program or with a regulation promulgated by an administering agen cy to implement a program that the agency has (a) In order to provide guidance concerning determined is a special purpose credit program under §202.8(a) (1) of Regulation B. the intended coverage of §202.8 ( a ) 1 of Regulation B, the Board interprets a term used in that section (c) In addition, the Board announces that it as follows: A credit program is considered to be will not make determinations as to whether p ar “expressly authorized by Federal or State law” if ticular programs benefit an “economically disad it is authorized by the terms of a Federal or State vantaged class of persons.” The Board believes that statute or by a regulation lawfully promulgated such a determination is more properly made by by the administering agency (i.e., the agency re the agency charged with the administration of the sponsible for implementing the program ). loan program. 1 S t a n d a r d s f o r p r o g r a m s . S u b je c t t o t h e p r o v is io n s o f s u b s e c t i o n ( b ) , th e A c t a n d t h is P a r t a r e n o t v io l a t e d if a c r e d ito r r e f u s e s t o e x t e n d c r e d it t o a n a p p lic a n t s o l e l y b e c a u s e th e a p p lic a n t d o e s n o t q u a lif y u n d e r th e s p e c ia l r e q u ir e m e n t s th a t d e fin e e lig ib i lit y f o r t h e f o l l o w i n g ty p e s o f s p e c ia l p u r p o s e c r e d it p r o g r a m s : ( 1 ) A n y c r e d it a s s is t a n c e p r o g r a m e x p r e s s ly a u t h o r iz e d b y F e d e r a l o r S ta te la w f o r t h e b e n e fit o f a n e c o n o m i c a l l y d is a d v a n t a g e d c la s s o f p e r s o n s ;
@FedFRASER