The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
C i r c u l a r No. 76-82 J u n e 10, 1976 American Revolution Bicentennial REGULATION B— EQUAL CREDIT OPPORTUNITY A C T P r o p o s e d A m e n d m e n ts R e g a r d i n g t h e F u r n i s h i n g of C r e d i t Info rm atio n TO ALL BANKS, OTHER CREDITORS, AND OTHERS CONCERNED IN THE ELEVENTH FEDERAL RESERVE DISTRICT: T h e B o a r d of G o v e r n o r s of t h e F e d e r a l R e s e r v e S y s t e m h a s p r o p o s e d fo r c o m m e n t a c l a r i f i c a t i o n of a p a r t of R e g u l a ti o n B, im p le m e n ti n g t h e E qual C r e d i t O p p o r t u n i t y A c t. As now w r i t t e n , t h e r e g u l a t i o n c a n b e i n t e r p r e t e d a s r e q u i r i n g t h a t c r e d i t r e p o r t i n g a g e n c i e s m a in ta in tw o s e p a r a t e fil e s f o r m a r r i e d c o u p l e s s h a r i n g a c r e d i t a c c o u n t , a n d to r e p o r t c r e d i t in fo rm a tio n t w i c e , o n c e in t h e n am e o f t h e h u s b a n d a n d o n c e in t h e n a m e of t h e w ife . T h e p r o p o s e d a m e n d m e n t s to S e c tio n 2 0 2 .6 of R e g u l a ti o n B w o u ld e lim i n a te t h i s p o s s i b l e i n t e r p r e t a t i o n b y s t a t i n g t h a t c r e d i t o r s s h o u l d r e p o r t c r e d i t in fo rm a tio n r e l a t i n g to t h e s h a r e d a c c o u n t o f a m a r r i e d c o u p l e " in a m a n n e r r e f l e c t i n g t h e p a r t i c i p a t io n of b o th s p o u s e s ." U n d e r t h e e x i s t i n g r e g u l a t i o n a n d t h e p r o p o s e d a m e n d m e n t , a w o m an w h o is c r e d i t w o r t h y in h e r ow n r i g h t w ill b e a b l e to e s t a b l i s h h e r o w n s e p a r a t e file a c c e s s i b l e t h r o u g h t h e u s e of o n l y h e r na m e b y o p e n i n g a c c o u n t s in h e r n a m e . T h e B oard also p ro p o se d o th e r conform ing c h a n g e s . p r o p o s a l is e n c l o s e d . T h e t e x t of t h e B o a r d ' s C o m m en ts to t h e p r o p o s e d a m e n d m e n t s s h o u l d b e d i r e c t e d to t h e S e c r e t a r y , B o a r d o f G o v e r n o r s of t h e F e d e r a l R e s e r v e S y s t e m , W a s h i n g to n , D . C . 20551, D o ck et No. R -0 038 , a n d s h o u l d b e s e n t e a r l y e n o u g h to b e r e c e i v e d b y J u n e 30, 1976. A n y q u e s t i o n s on R e g u l a ti o n B o r t h e E q u a l C r e d i t O p p o r t u n i t y A c t s h o u l d b e d i r e c t e d to R i c h a r d B . W e s t, S e n i o r A t t o r n e y in o u r R e g u l a t i o n s D e p a r t m e n t , a t (214) 651-6169. S in ce rely y o u rs , T . W. P l a n t F i r s t V ic e P r e s i d e n t Enclosure This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) FEDERAL RESERVE SYSTEM [12 C F R 202] E Q U A L CREDIT OP P O R T U N I T Y [Docket No. R-0038] Proposed A m e n d m e n t s T h e Board is considering several amendments to §202 .6 of Regulation B , Equal Credit Opportunity. This section, w h i ch relates to the furnishing of credit information b y creditors to consumer reporting agencies , w a s designed to remove an obstacle that m a n y w o m e n encountered in attempting to obtain credit, namely, the lack of a credit history. Traditionally, creditors reported information relating to the accounts of married couples in the husband's n a m e only. Thus, only the h usba nd accumulated a credit history . Section 202.6 of Regulation B w a s intended to r e m e d y this situation b y enabling married w o m e n to develop a credit history. T o accomplish this result, §202.6(a) requires a creditor to determine whether a particular account is one whic h both spouses will use or for which both will be contractually liable. T h e creditor must then designate the account accordingly. Section 202.6(a) (2) (i) n o w provides that w h e n the creditor reports information concerning the account to a consumer reporting agency, i must report the information "in a m a n n e r which will enable the t agencies to provide access to information about the account in the n a m e of each spouse." T h e Board is concerned that the separate files that would be established for married w o m e n under the existing regulation m a y be incomplete. W h e n credit information about a shared account is reported under the wife's name, it will be placed in her separate file, but the wife's separate file will not contain "undesig nated" information about the couple's prior credit experience, i/ T h e Board believes that the proposed a m e n d m e n t will prevent this occurrence. Representatives of consumer reporting agencies have informed the Board that in order to provide access to information about a shared account in the n a m e of each spouse, credit information about the account must be reported twice and two files created, one in the husband's n a m e and one in the wife's name. This duplica tion of credit information will be costly and m a y result in an increase in the cost of credit to the consumer. In addition, the requirement to provide access to a file b y using either spouse's n a m e m a y be unrealistic in light of existing technology. 1/ Undesignated information is information not specifically attributable to the h u s b a n d or wife. All existing information currently is undesignated. - 2 - U n d e r either the existing language or the proposed a m e n d m e n t to §202.6(a), a married w o m a n w h o is creditworthy will be able to establish her o w n separate file b y opening her o w n individual accounts. Section 202.6(b) contains a Notice w h i ch creditors are required to mail or deliver to their customers between N o v e m b e r 1, 1976 and February 1, 1977. This Notice, w h i c h is entitled "Credit History for Married Persons," discusses the tradi tional practice of reporting credit information in the husband's n a m e only. It explains that if a customer wishes to create a credit history for both sp ouses, he or she m a y sign the detachable request form and return it to the creditor. T h e Board proposes to a m e n d the Notice to explain mor e clearly h o w infor mation about a shared account will be reported if the customer returns the detachable form to the creditor. In addition, the Notice currently does not explain h o w a creditor will report information about an account if the customer does not return the detachable f o r m . T h e Board proposes to a m e n d the Notice to explain that if the customer does not return the form, information regarding the account will be reported the same w a y it is n o w reported. For these reasons, the Board proposes to a m e n d §202.6 as follows (changes underlined): S E C T I O N 202.6 — F U R N I S H I N G O F C R E D I T I N F O R M A T I O N (a) Accounts established on or sifter N o v e m b e r 1, 1976. * * * * * (2) W h e n furnishing information to consumer reporting agencies or others concerning an account designated under this section, a creditor shall report the designation and fur nish any information concerning the account: (i) T o consumer reporting agencies , in a m a n n e r which will enable the agencies to provide that information in a w a y w h ich reflects the participation of each spouse; and (ii) T o recipients other than such agencies, in a w a y wh i c h reflects the participation of each spouse. (b) Accounts established prior to N o v e m b e r 1, 1976. * * * * * - 3 - NOTICE CREDIT HISTORY F O R MARRIED PERSONS T h e Federal Equal Credit Opportunity Act forbids all creditors from discriminating against any applicant on the basis of sex or marital status in any aspect of a credit trans action. Regulations adopted under the Act give married per sons the right to have credit information concerning those credit accounts that they hold or use jointly with a spouse reported to consumer reporting agencies and creditors in a m a n n e r reflecting the participation of both the wife and husband. Accounts of married persons opened before N o v e m b e r 1976— even those opened in the names of both spouses— are often reported in only the husband's name. This is generally true regardless of w h o has been paying the bills or w h o s e income w a s used to obtain the account. As a result, m a n y married w o m e n do not have a credit history in their o w n n a m e s , although their husbands d o . If a w o m a n ever needs to obtain credit on her o w n , for e x a m p l e , w h e n divorced or w i d o w e d , a credit history is usually necessary. If your account(s) with us is a joint account whic h you share with your spouse or an account(s) in the n a m e of one spouse which the other spouse is authorized to use, you have the right to have credit information concerning your account(s) with us reported so as to reflect the participa tion of both spouses. If yo u choose to have credit informa tion concerning your account(s) with us reported in a m a n n e r reflecting the participation of both spouses, please fill in the statement below and return it to u s . Please note that the Federal regulation provides that your signature below will not m a k e either you or your spouse legally liable for any different or greater debts. It will only request that credit information be reported in a m a n n e r reflecting the participation of both spouses in the use and pa yment of the account(s) . NOTE If you do not return the form below with your instructions or otherwise advise us of your w i s h e s , the credit history information concern ing your account(s) will be reported the w a y it is n o w reported. - 4 - To aid in the consideration of this matter by the Board, interested persons are invited to submit relevant data or comments. Any such material should be sub mitted in writing to the Secretary, Board of Governors of the Federal Reserve System, Washington, D ,C. 20551, to be received not later than June 30, 1976. All material submitted should include the docket number R-0038. This notice of proposed rulemaking is published pursuant to the Board's authority under §703(a) of the Equal Credit Opportunity Act (15 U ,S ,C. 1691b) . By order of the Board of Governors, May 21, 1976. Theodore &. Allison Secretary of the Board [SEAL]
@FedFRASER