Full text of Federal Reserve Bank of New York Circulars : 10828. Equal Credit Opportunity

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FEDERAL RESERVE BANK
OF NEW YORK
Circular No. 10828
January 16, 1996

EQUAL CREDIT OPPORTUNITY
Proposed Revisions to the Official Staff Commentary to Regulation B
Comments Invited by February 28
To All Depository Institutions in the Second
Federal Reserve District, and Others Concerned:

Following is the text of a statement issued by the Board of Governors of the Federal Reserve
System:
The Federal Reserve Board has published for public comment proposed revisions to its
Regulation B, Equal Credit Opportunity, staff commentary.
Comment is requested by February 28,1996.
The proposed revisions to the commentary provide guidance on credit scoring, spousal signature
rules, and other issues. Specifically, the changes would address the use of age in credit scoring systems.
The proposed revisions to the signature rules clarify that a creditor’s valuation of an applicant’s inter­
est in property must be based on the form of ownership prior to or at consummation; the options a cred­
itor may offer an applicant if an additional signature is required; and the fact that a creditor may require
that the principals of a business guarantee business credit.

Printed on the following pages is the text of the proposal, as published in the Federal Register.
Comments thereon should be submitted by February 28, 1996, and may be sent to the Board, as
indicated in the notice, or to our Compliance Examinations Department.




W illiam J. M c D onough ,

President.

Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules
b etw een 8:45 a.m. and 5:15 p.m .
w eek d ays, or to th e guard station in the
E ccles B u ild in g courtyard on 20th
Street, N .W . (b etw een C onstitution
A v en u e an d C Street) at any tim e.
C om m ents receiv ed w ill be availab le for
in sp e c tio n in R oom M P -5 0 0 o f the
M artin B u ild in g b e tw e e n 9:00 a.m. and
5:00 p.m . w eek d a y s, e x c e p t as p rovid ed
in 12 CFR 261.8 o f th e B oard’s rules
regarding the av a ila b ility o f inform ation.

FEDERAL RESERVE SYSTEM
12 CFR Part 202
[Regulation B; D ocket No. R-0910]

Equal Credit Opportunity
AGENCY: Board o f G overnors o f th e

Federal R eserve System .
ACTION: P roposed rule; o fficia l staff

interpretation.
SUMMARY: T he Board is p u b lish in g for
com m ent prop osed r e v isio n s to its
official staff com m en tary to R egu lation
B (Equal Credit O pportunity). T he
com m entary ap p lies and in terprets the
requirem ents o f R egu lation B and
substitutes for in d iv id u a l staff
interpretations. T he p ro p o sed r ev isio n s
to the com m entary p ro v id e g u id a n ce on
issu es that the Board h as b e e n ask ed to
clarify, in clu d in g credit sco rin g and
spousal signature rules.
DATES: C om m ents m u st be r eceiv ed on
or before February 2 8 ,1 9 9 6 .
ADDRESSES: C om m ents sh o u ld refer to
Docket No. R -0 9 1 0 , an d m ay be m a iled
to W illiam W. W iles, Secretary, Board o f
Governors o f the Federal R eserve
System , 20th Street an d C on stitu tion
A venue, N .W ., W ash in gton , D.C. 205 5 1 .
C om m ents also m ay be d eliv ered to
Room B -2 2 2 2 o f the E ccles B u ild in g




67097

S ec tio n 2 0 2 .6 — R u les C on cern in g
E v a lu a tio n o f A p p lic a tio n s
6(b) S p e c ific R ules C oncerning U se o f
Inform ation
6(b)(2)

C om m ent 6(b)(2)— w o u ld be revised
2
to ad d ress th e u se o f age in credit
scorin g sy stem s that u se scorecards for
different age groups b a sed on
ch aracteristics that are p red ictive for
each group. Each scorecard con sid ers
FOR FURTHER INFORMATION CONTACT: Jane
th e correlation am on g th e p redictive
Jensen G ell, S h eila h A. G oodm an, or
variab les (representing characteristics
N atalie E. T aylor, Staff A ttorneys,
su ch as in co m e, len gth o f resid en ce, and
D iv isio n o f C on su m er and C om m unity
cred it history) for th e age group. Each
A ffairs, Board o f G overnors o f the
p red ictiv e variable is a ssig n ed the
Federal R eserve S y stem , at (202) 4 5 2 appropriate w eig h t g iv e n the im pact o f
3667 or 4 5 2 -2 4 1 2 . For u sers o f the
th e other p red ictive variab les in that age
T e leco m m u n ica tio n s D ev ice for the
group, so that com p arab le scores for
Deaf, con tact D orothea T h o m p so n at
each group reflect th e sam e lev el o f risk.
(202) 4 5 2 -3 5 4 4 .
U nder the ECOA an d R egulation B, if
a creditor co n sid ers age— w h eth er by
SUPPLEMENTARY INFORMATION:
d irectly a ssign in g a v a lu e to age or by
I. B ack grou n d
so m e other m ean s su ch as estab lish in g
scorecard s for d ifferen t age groups— the
T he Equal Credit O p p ortu n ity A ct
age o f an eld erly a p p lica n t m u st not be
(ECOA), 15 U.S.C. 1 6 9 1 —
1691f, m akes it
u n la w fu l for creditors to d iscrim in a te in a ssig n ed a negative v a lu e. T he Board
b e lie v e s that, to en su re that the
any asp ect o f a cred it transaction on the
treatm ent accorded a p p lica n ts age 62 or
b asis o f race, color, relig io n , national
o ld er c o m p lie s w ith th e law , eld erly
origin, sex , m arital statu s, or age
(p rovid ed the a p p lica n t h as th e cap acity a p p lica n ts w h o d o n o t q u alify for credit
u n d er the factors a ssig n e d to the
to contract), b eca u se a ll or part o f an
scorecard for their age group m ust be
a p p lica n t’s in co m e d e riv es from p u b lic
rescored un d er th e factors assign ed to
a ssista n ce, or b eca u se th e ap p lica n t has
th e scorecards for a ll oth er age groups
in g ood faith e x ercised any right under
in th e system . C om m ent 6(b)(2)—
2
th e C onsum er Credit P rotection A ct.
w o u ld b e revised to incorporate this
T h is statute is im p le m e n te d by the
co n cep t.
B oard’s R egulation B (12 CFR Part 202).
P rop osed com m en t 6(b)(2)—
4
T he Board a lso has an o fficia l staff
a d d resses the u se o f age in a reverse
com m entary (12 CFR Part 202 (Supp. I))
m ortgage transaction. A reverse
that interprets the regu lation . T he
m ortgage is a h om e-secu red loan in
com m entary p ro v id es gen eral gu id an ce
w h ic h th e borrower re c e iv es paym ents
to creditors in a p p ly in g R egulation B to
from th e creditor, and th e repaym ent o f
various credit tran saction s, and is
th ese am ou n ts d o es n ot b eco m e d ue
u p d ated p e rio d ica lly to ad d ress
u n til th e borrow er d ie s, m o v es
sig n ifica n t q u estio n s that arise.
p erm an en tly from th e h o m e, or transfers
title to th e hom e. T h e p rop osed
II. E xp la n a tio n o f P ro p o sed
co m m en t clarifies that u sin g age, as a
C om m entary
proxy for life ex p ecta n cy , in a reverse
S ectio n 2 0 2 .2 — D efin itio n s
m ortgage transaction to d eterm in e the
lin e o f credit or m o n th ly p aym en t
2(p) E m p irically D erived an d Other
am ou n t that a borrow er w ill receive
Credit S corin g S y stem s
d o es n o t v io la te th e regulation.
C om m ent 2 (p )-2 w o u ld b e revised to
6(b)(6)
p rovid e g u id an ce o n revalid ation
C om m ent 6 (b )(6 )-l w o u ld b e revised
requirem ents for cred it scorin g system s.
to clarify that if a cred itor con sid ers
S ectio n 2 0 2 .5 — R u le s C on cern in g
cred it h istory, it m u st c o n sid er
T akin g o f A p p lic a tio n s
inform ation p resen ted by the ap p lican t
that is not in clu d ed in th e credit report,
5(e) W ritten A p p lic a tio n s
i f it is the typ e the cred itor norm ally
C om m ent 5 (e )-3 w o u ld be revised to
co n sid ers on a credit report. T he
cross-reference th e p ro p o sed com m en ts
co m m en t also cla rifies that w h en one
to sectio n 202.13(b ), w h ic h address
sp o u se is a p p lyin g for in d iv id u a l credit,
a p p lica tio n s su b m itted through an
th e creditor m u st co n sid e r inform ation
electro n ic m ed iu m .
p resen ted by the a p p lica n t that w o u ld

6 7 098

Federal Register / VoL 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules

ten d to sh o w that a cred it h istory
appearing in th e nam e o f both sp o u se s
is n o t reflective o f th e a p p lica n t’s
in d iv id u a l cred itw orth in ess.
S ectio n 2 0 2 .7 —R u les C on cern in g
E x ten sio n s o f C red it
7(d) Signature o f S p o u se or O ther.
P erson
7(d)(2)
P rop osed com m en t 7(d)(2)— clarifies
1
that in determ ining th e v a lu e o f an
a p p lica n t’s interest in property, a
creditor m ust look to th e actu al form o f
o w n ersh ip o f the property prior to or at
con su m m ation .
R egulation B requires that if an
ap p lica n t is not in d iv id u a lly
cred itw orth y and th e creditor se ek s th e
signature o f a co-ow n er o f property
relied u p on to estab lish
cred itw orth in ess, th e signature m ay be
required o n ly on th e d o cu m en ts that are
reasonably n ecessary, u n d er state law ,
to m ake the property availab le in th e
ev e n t o f death or default o f th e
ap p lican t. In som e states, a signature on
th e debt instrum ent itse lf m ay be
n ecessary. In other states, a cred itor m ay
b e able to protect its interest w ith a
signature on an in stru m en t that creates
a lim ited obligation— a d o cu m en t
a llo w in g the creditor to reach the
n o n a p p lica n t sign atory’s in terest o n ly in
th e property at issu e in th e e v en t o f
default. E xam p les o f su c h in stru m en ts
in c lu d e a security agreem ent, m ortgage,
d eed o f trust, or lim ited guarantee. T he
creditor c o u ld also co n sid e r req u estin g
a signature on a d o cu m en t so m e tim e s
referred to as a status statem en t. T h is
d o cu m en t ascertains th e character o f
property that w ill be u sed in th e cred it
d ecisio n ; affirm s the p u rp ose o f th e loan
(if a b u sin e ss purpose, affirm s or
d isc la im s any interest or p articip ation
in th e business); and attests to or
d isc la im s the n o n -a p p lica n t’s d esire to
b e an applicant or guarantor o f th e
requested credit.
T h e Board prop oses to revise
co m m en t 7 (d )(2 )-l to clarify that w h ere
an in d iv id u a l ap p lican t jo in tly o w n s
property in a form and am ou n t
su fficien t to estab lish cred itw o rth in ess,
a creditor m ay not require th e
n o n a p p lica n t joint o w n er o f the
property to execu te any in stru m en t that
forfeits or co n v e y s that p erso n ’s in terest
in the property to the a p p lican t or other
o w n ers as a co n d itio n o f credit. For
ex a m p le, a creditor c o u ld not require a
n on -ap p lican t sp o u se to q u itclaim their
interest in jointly o w n ed property relied
u p o n to establish cred itw o rth in ess if th e
ap p lican t sp o u s e ’s in terest in the
property, and other resou rces, are




su fficien t to su p p ort the credit
requested.

in form ation to th e exten t the v id eo
d isp la y m akes it p o ssib le to do so.

7(d)(6)

III. F orm o f C om m ent Letters

P rop osed co m m en t 7(d)(6)— cla rifies
1
that a creditor m ay require that th e
partners, officers or directors o f a
cred itw orth y b u sin e ss p erson ally
guarantee an ex te n sio n o f credit to the
b u sin e ss, as lon g as a guarantee is not
required on a p roh ib ited b asis— e.g.,
o n ly th o se b u sin e sse s o w n ed by w o m e n
or m in orities.
C om m ent 7(d)(6)— w o u ld be rev ised
2
to clarify that w h e n th e circu m sta n ces
o f a b u sin e ss lo a n require th e guarantee
o f a sp o u se w ith n o interest in th e
b u sin e ss, th e creditor c o u ld ask the
d isin terested sp o u se to sign a lim ite d
guarantee.

C om m ent letters sh o u ld refer to
D ock et N o. R— 9 1 0 . T he Board requests
0
that, w h e n p o ssib le, com m en ts be
prepared u sin g a standard courier
ty p efa ce w ith a ty p e siz e o f 10 or 12
characters per in ch . T h is w ill en ab le the
Board to con vert th e text in to m ach in ereadable form through electron ic
sca n n in g , and w ill facilitate autom ated
retrieval o f co m m en ts for review .
C om m en ts m ay also be subm itted on
com p u ter d isk ettes, u sin g eith er the 3 .5 ”
or 5 .2 5 ” siz e , in any IB M -com patible
D O S-based format. C om m ents on
co m p u ter d isk ettes m u st be
a cco m p a n ied by a paper version.

S e c tio n 2 0 2 .1 3 — In form ation f o r
M o n ito rin g P u rp o ses

List o f S ubjects in 12 CFR Part 202

13(a)

Inform ation T o B e R equested

C om m ent 1 3 (a )-6 w o u ld b e r ev ised to
clarify that a refin an cin g in v o lv e s the
satisfa ctio n o f an e x istin g o b ligation that
is rep la ced by a n e w obligation
un d ertak en b y th e sam e borrow er. T he
p ro p o sed clarification is co n siste n t w ith
th e d e fin itio n o f “refin an cin g” in other
Board regu lation s, su ch as R egulation C
(H om e M ortgage D isclosu re), 12 CFR
2 0 3 , and R egulation Z (Truth in
L ending), 12 CFR 226.
13(b)

O btaining o f Inform ation

P rop osed co m m en t 1 3 (b )-4 a d d resses
th e c o lle c tio n o f m on itorin g inform ation
for a p p lica tio n s su b m itted through an
e lec tro n ic m ed iu m that d o es n ot perm it
th e creditor to v ie w th e ap p lican t. In
th e se in sta n ces, th e creditor sh o u ld treat
th e a p p lica tio n as if it w ere a ccep ted by
m a il or telep h o n e.
P ro p o sed com m en t 13 (b )-5 ad d resses
th e c o lle c tio n o f m on itorin g inform ation
for a p p lica tio n s sub m itted through an
in teractive v id e o p rocess. R egulation B
requires a creditor to ask h om e m ortgage
loan a p p lica n ts for m onitoring
inform ation and, if th e ap p lican t
c h o o se s n ot to p rovid e the inform ation,
requires the cred itor to n o te the
inform ation on th e ap p lication on the
basis o f v isu a l observation or surnam e.
T here is an e x c e p tio n for te lep h o n e or
m ail a p p lica tio n s. W here the creditor
has the cap ab ility to v ie w the a p p lican t
during the p ro cess, h ow ever, su ch as
w ith an in teractive v id eo , the Board
b e lie v e s the a p p lica tio n is lik e an inperson ap p lica tio n . T h u s, a creditor
m u st ask th e a p p lican t for m on itorin g
inform ation and enter the inform ation
p rovid ed on th e ap p lica tio n form. If th e
ap p lican t d o es not p rovide the
inform ation, the creditor m ust n o te the

A ged , Banks, banking, C ivil rights,
C on su m er p rotection , Credit,
D iscrim in a tio n , Federal R eserve S ystem ,
M arital statu s d iscrim in ation , P en a lties,
R elig io u s d iscrim in a tion , R eporting and
record k eep ing requirem ents, S ex
d iscrim in a tio n .
Certain c o n v e n tio n s have b een u sed
to h ig h lig h t th e p rop osed ch an ges to the
staff com m entary. N e w language is
sh o w n in sid e b old -faced arrow s, w h ile
language that w o u ld be rem oved is set
o ff w ith brackets.
For th e reason s se t forth in the
pream ble, th e Board p rop oses to am end
12 CFR part 202 as se t forth below :

PART 202— EQUAL CREDIT
OPPORTUNITY (REGULATION B)
1. T h e authority cita tion for Part 202
c o n tin u e s to read as follow s:
Authority: 15 U.S.C. 1691-1691f.
2. In S u p p lem en t I to Part 202, u n d er
S e c tio n 2 0 2 .2 D efin itio n s, under 2 (p )
E m p iric a lly d e r iv e d a n d o th er c r e d it
sc o rin g sy ste m s., three n e w sen ten ces
w o u ld be ad d ed at th e end o f paragraph
2 to read as follow s:
S u p p le m e n t I to P art 2 0 2 — O fficial S ta ff
In terp reta tio n s
*
*
*
*
*
Section 202.2 Definitions
*
*
*
*
*
2(p) Empirically derived and other credit
scoring systems.

*

* * * *
2.
* * * ►To ensure that predictive
ability is being maintained, the performance .
of the system should be monitored. This
could be done, for example, by analyzing the
loan portfolio to determine the delinquency
rate for each score interval. If these data
indicate that the system is no longer
identifying risk as predicted, the system must

Federal Register / Vol. 60, No. 249 / Thursday, December 2ff, 1995 / Proposed Rules
home, the current interest rate, and the
borrower’s life expectancy. Age may be
directly taken into account in setting the
3.
In S u p p lem en t I to Part 20 2 , u n d er terms of a reverse mortgage without violating
the regulation B.-^
S ectio n 20 2 .5 R u le s C o n cern in g T a k in g
*
*
*
*
*
be revalidated and the variables for each
score interval adjusted accordingly.-**
*
*
*
*
*

67099

partition and the cost of such action. t>This
determination must be based on the actual
form of ownership of the property prior to or
at consummation, and not on the possibility
of a subsequent change in the form of
ownership. For example, in determining
o f A p p lic a tio n s, u n d er 5(e) W ritten
whether a married applicant’s interest in
Paragraph 6(b)(6)
a p p lic a tio n s., paragraph 3. w o u ld b e
property is sufficient to satisfy the creditor’s
1. [Types o f credit references.]
revised to read as follow s:
standards o f creditworthiness for individual
►Evaluating credit history .-^ A creditor may credit, a creditor may not obtain the signature
*
*
*
*
*
restrict the types of credit history and credit
spouse based on the
references that it will consider, provided that of the nonapplicantapplicant’s separatelySection 202.5 Rules Concerning Taking o f
possibility that the
the restrictions are applied to all credit
Applications
held property may be transferred into
applicants without regard to sex, marital
*
*
*
*
*
tenancy by the entirety after consummation.
status, or any other prohibited basis.
Similarly, a creditor may not routinely
However, on the applicant’s request, a
5(e) Written applications.
require a nonapplicant
to execute
creditor must consider credit information not any document (such as joint owner deed) Uiat
*
*
*
*
*
a quitclaim
reported through a credit bureau when the
would change the nonapplicant joint owner’s
3. Computerized entry. Information entered
information relates to the same types of
interest in
by the
directly into and retained by a computerized
credit references and history that the creditor to support property offered credit. applicant
system qualifies as a written application
the extension of
would consider if reported through a credit
b. Other options to support credit .<3 If the
under this paragraph. (See the commentary to
bureau.
section 202.13(b) £►, Applications through
applicant’s interest in the property does not
►i. At the applicant’s request, a creditor
electronic media and Applications through
support the amount and terms of credit
must consider credit information of the same sought, the creditor may give the applicant
interactive v id e o s .)
type that the creditor would consider if
*
*
*
*
*
some other option of providing additional
reported through a credit bureau. For
support for the extension of credit!, ft ► .
4. In S u p p lem en t I to Part 202,
example,.if a creditor normally considers car F-^8or example!—]►:
S ectio n 2 0 2 .6 R u les C on cern in g
loan payments, and the consumer presents
i ^ l [r]^-R-<lequiring an additional party
E valu ation o f A p p lic a tio n s w o u ld be
credible information (such as cancelled
under § 202.7(d)(5)^;
checks or money-order receipts) about
am en d ed as follow s:
ii.
-^ [o]>-0<ftfering to grant the
payment history on a car loan from a finance applicant’s request on a secured credit
a. U nder Paragraph 6(b)(2), paragraph
company that did not report to a credit
2. w o u ld be revised ; paragraphs 4. and
basis^-; or
iii.
- ^ [aJ^-A-«*skftig for the signature of the
5. w o u ld b e redesign ated as paragraphs bureau, the creditor must consider this
information in its evaluation of credit
co-owner of the property on an instrument
5. and 6., resp ectively; an d n e w
history.
that ensures access to the property but does
paragraph 4. w o u ld be added; and
ii. At the applicant’s request, a creditor
not impose personal liability unless
b. Paragraph 6(b)(6) w o u ld be rev ised .
must consider information that a credit
Tiecessary under state la w ^ (which could
T he ad d itio n s an d r ev isio n s w o u ld
history reported in both spouses’ names does include, for example, a security agreement,
read as follow s:
not accurately reflect the applicant’s ability
deed o f trust, mortgage, limited guarantee,
*
*
*
*
*
or willingness to repay. For example, assume quitclaim deed, or status statement from the
an applicant applies for individual credit and ponapplicant owner).
Section 202.6—Rules Concerning Evaluation
the credit bureau report shows late payments * * * - • - * *
o f Applications
on a mortgage obligation held jointly with a
*
*
*
*
*
Paragraph 7(d)(6)
former spouse. If the applicant can
1. Guarantees. A guarantee on an extension
Paragraph 6(b)(2)
demonstrate that the former spouse alone
of credit is part o f a credit transaction and
* * * * *
was responsible for the late payments (such • therefore subject to the regulation. ► A
2.
Consideration o f age in a credit scoring as by a transfer of title to the former spouse
creditor may require the personal guarantee
and a document from the mortgage creditor
system. Age may be taken directly into
of the partners, directors, or officers of a
that released the applicant from liability for
account in a credit scoring system that is
business even if the business itself is
the debt) the creditor must disregard both the ‘creditworthy. The guarantee must be based
“demonstrably and statistically sound,” as
mortgage debt and the late payments in
defined in § 202.2(p), with one limitation: an
on the guarantor’s relationship with the
determining the applicant’s
applicant who is 62 years or older must be
business, however, and not on a prohibited
creditworthiness.-^1
treated at least as favorably as anyone who
basis.
*
*
*
*
*
is under 62. K>-For example, an applicant
2. Spousal guarantees. The rules in
who is 62 years or older may not be denied
§ 202.7(d) bar a creditor from requiring the
5. In Sv\pplement I to Part 202,
credit if an applicant under age 62 with the
signature of a guarantor’s spouse just as they
S ectio n 202.7—R u le s C on cern in g
same characteristics would be approved for
E x ten sio n s o f C redit, would be amended bar the creditor from requiring the signature
credit under the scoring system. Thus, a
of an applicant’ spouse. For example,
s
as follows:
creditor using an age-based credit scoring
although a creditor may require all officers of
a. Under Paragraph 7(d)(2), paragraph a closely held corporation to personally
system must ensure that elderly applicants
who do not qualify under the factors assigned 1. would be revised; and
guarantee a corporate loan, the creditor may
to elderly age groups ar^ rescored using the
b. Paragraph 7(d)(6) would be revised^ not automatically require that spouses of
factors or weights assigned to all other age
The revisions would read as follows:
married officers also sign the guarantee. If an
groups in the system.-**!
* * * * *
evaluation of the financial circumstances of
*
*
*
*
*
an officer indicates that an additional
Section 202.7—Rules Concerning Extensions
signature is necessary, however, the creditor
► 4. Consideration o f age in a reverse
of Credit
may require the signature of a spouse in
mortgage. A reverse mortgage is a home*
*
*
*
*
appropriate circumstances—for example, if
secured loan in which the borrower receives
the property relied upon to meet the
payments from the creditor, and does not
Paragraph 7(d)(2)
creditor's standards is held jointly. In such a
become obligated to repay these amounts
1. Jointly owned property. O-a. Valuation
case, the creditor could ask the spouse to sign
until the expiration of a term or when the
o f applicant’s interest.-^ In determining the
an instrument that provides for liability to
borrower dies, moves permanently from the
value of [the] ^-an-<< applicant’s interest in
the extent of the spouse’s interest in the
home, or transfers title to the home.
jointly owned property, a creditor may
property relied upon to support the credit
Disbursements to the borrower under a
consider factors such as the [form of
(such as a limited guarantee).-^
reverse mortgage typically are determined by ownership and the] property’s susceptibility
*
*
*
*
*
considering the value of the borrower’s
to attachment, execution, severance, or




67100

Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules

6. In Supplement I to Part 202,
Section 202.13—Information for
Monitoring purposes, would be
amended as follows:
a. Under 13(a) Information to be
requested., paragraph 6. would be
revised; and
b. Under 13(b) Obtaining of
information., paragraphs 4. and 5.
would be redesignated as paragraphs 6.
and 7. respectively, and new paragraphs
4. and 5. would be added.
The revisions and additions would
read as follows:
* * * * *
Section 202.13 Information for Monitoring
purposes
13(a) Information to be requested.
*
*
*
*
*
6.
Refinancings. ► A refinancing occurs
when an existing obligation is satisfied and
replaced by a new obligation undertaken by
the same borrower. d A creditor that
receives an application to [change the terms
and conditions of) ► refin an ced an existing
extension of credit made by that creditor for
the purchase of the applicant’s dwelling may
request the monitoring information again but
is not required to do so if it was obtained in
the earlier transaction.
*
*
*
*
*
13(b) Obtaining o f information.
*
*
*
*
*
►4. Applications through electronic
media. If an applicant applies through an
electronic medium (for example, via the
Internet or by facsimile) without any face-toface interactive video capability, the creditor
should treat the application as if it were
accepted by mail or telep h o n e.d
►5. Applications through interactive
video. If a creditor takes an application
through an interactive application process
with video capabilities, and the creditor caD
see the applicant, the creditor should treat
these applications as taken in person and
collect the monitoring inform ation.d
*
*
*
*
*
By order of the Secretary of the Board,
acting pursuant to delegated authority for the
Board of Governors of the Federal Reserve
System, December 21,1995.
Jennifer J. Johnson,
Deputy Secretary o f the Board.
[FR Doc. 95-31363 Filed 12-27-95; 8:45 am]
BILUNG CODE 6210-01-P