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March 22, 1990

To the Addressee:

Enclosed for those who maintain sets of the Board of Governors'
regulations are the following documents:
1. Regulation B, "Equal Credit Opportunity," revised effective
December 8, 1989.
(This pamphlet supersedes the previous revision of the
regulation and all subsequent amendments thereto.)
2. Regulation C, "Home Mortgage Disclosure," as amended effective
January 1, 1990.
(This pamphlet supersedes the previous revision of the
regulation.)
3. Amendments to Regulation Y, "Bank Holding Companies and Change in
Bank Control," effective February 13, 1990.
(These amendments, which
were originally sent to you with Circular No. 10339, have been reprinted
because the hole punching on the earlier printing was not aligned
correctly.
)
Questions regarding Regulation B or C may be directed to our
Compliance Examinations Department (Tel. No. 212-720-5914).




Circulars Division
FEDERAL RESERVE BANK OF NEW YORK

Board of Governors of the Federal Reserve System

Regulation B
Equal Credit Opportunity
_

_ v

12 CFR 202; as revised effective December 8, 1989




Any inquiry relating to this regulation should be addressed to the Federal Reserve Bank of the
District in which the inquiry arises.
February 1990



Contents
Page

Page
Section 202.1—Authority, purpose, scope
(a) Authority and sco p e......................
(b) Purpose.............................................
Section 202.2—Definitions.........................
Section 202.3—Limited exceptions for
certain classes of transactions ...............
(a) Public-utilities credit......................
(b) Securities cred it..............................
(c) Incidental credit..............................
(d) Government credit ........................
Section 202.4— General rule prohibiting
discrimination...........................................
Section 202.5— Rules concerning taking of
applications...............................................
(a) Discouraging applications.............
(b) General rules concerning requests
for information................................
(c) Information about a spouse or
former spouse..................................
(d) Other limitations on information
requests.............................................
(e) Written applications......................
Section 202.6— Rules concerning
evaluation of applications........................
(a) General rule concerning use of
information ....................................
(b) Specific rules concerning useof
information ....................................
(c) State property la w s........................
Section 202.7— Rules concerning
extensions of cred it..................................
(a) Individual accounts........................
(b) Designation of nam e......................
(c) Action concerning existing openend accounts....................................
(d) Signature of spouse or other
person...............................................
(e) Insurance.........................................
Section 202.8—Special-purpose credit
programs...................................................
(a) Standards for programs.................
(b) Rules in other sections...................
(c) Special rule concerning requests
and use of information...................
(d) Special rule in the case of financial
need...................................................




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Section 202.9— Notifications........................
(a) Notification of action taken,
ECOA notice, and statement of
specific reasons...................................
(b) Form of ECOA notice and
statement of specific reasons.........
(c) Incomplete applications.................
(d) Oral notifications by smallvolume creditors..............................
(e) Withdrawal of approved
application.......................................
(f) Multiple applicants..........................
(g) Applications submitted through a
third p a rty .........................................
Section 202.10—Furnishing of credit
information.................................................
(a) Designation of accounts...............
(b) Routine reports to consumer
reporting agen cy............................
(c) Reporting in response to inquiry .
Section 202.11— Relation to state law ---(a) Inconsistent state laws....................
(b) Preempted provisions of state law
(c) Laws on finance charges, loan
ceilings.............................................
(d) State and federal laws not affected
(e) Exemption for state-regulated
transactions.....................................
Section 202.12—Record retention............
(a) Retention of prohibited
information .....................................
(b) Preservation of records.................
Section 202.13— Information for
monitoring purposes..................................
(a) Information to be requested.........
(b) Obtaining of information .............
(c) Disclosure to applicant (s) ...........
(d) Substitute monitoring program ..
Section 202.14— Enforcement, penalties,
and liabilities...............................................
(a) Administrative enforcement.........
(b) Penalties and liabilities.................
(c)

Failure of compliance...................

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i

Contents

Page
Appendix A—Federal enforcement
agencies.....................................................

15

Appendix B— Model application forms .. 15
Appendix C—Sample notification forms . 27




Page
Appendix D— Issuance of staff
interpretations........................................... 31
EQUAL CREDIT OPPORTUNITY
A C T ............................................................ 33

Regulation B
Equal Credit Opportunity

12 CFR 202; effective M
arch 23, 1977; as am
ended effective D
ecem 8, 1989*
ber

Purpose.

Section
202.1
Authority, scope, and purpose
202.2
Definitions
202.3
Limited exceptions for certain classes
of transactions
202.4
General rule prohibiting
discrimination
Rules concerning taking of
202.5
applications
Rules concerning evaluation of
202.6
applications
Rules concerning extensions of credit
202.7
Special-purpose credit programs
202.8
Notifications
202.9
202.10 Furnishing of credit information
202.11 Relation to state law
202.12 Record retention
202.13 Information for monitoring purposes
202.14 Enforcement, penalties, and
liabilities

(b)
The purpose of this regulation is
to promote the availability of credit to all
creditworthy applicants without regard to
race, color, religion, national origin, sex, mari­
tal status, or age (provided the applicant has
the capacity to contract); to the fact that all
or part of the applicant’s income derives from
a public assistance program; or to the fact that
the applicant has in good faith exercised any
right under the Consumer Credit Protection
Act. The regulation prohibits creditor prac­
tices that discriminate on the basis of any of
these factors. The regulation also requires
creditors to notify applicants of action taken
on their applications; to report credit history
in the names of both spouses on an account; to
retain records of credit applications; and to
collect information about the applicant’s race
and other personal characteristics in applica­
tions for certain dwelling-related loans.

Appendix A— Federal enforcement agencies
Appendix B— Model application forms
Appendix C—Sample notification forms
Appendix D— Issuance of staff interpretations

S E C T IO N 202.2— Definitions

SE C T IO N 202.1— Authority, Scope, and
Purpose

Authority and scope.

(a)
This regulation is is­
sued by the Board of Governors of the Feder­
al Reserve System pursuant to title VII
(Equal Credit Opportunity Act) of the Con­
sumer Credit Protection Act, as amended (15
USC 1601 et seq.). Except as otherwise pro­
vided herein, the regulation applies to all per­
sons who are creditors, as defined in section
202.2(/). Information-collection requirements
contained in this regulation have been ap­
proved by the Office of Management and Bud­
get under the provisions of 44 USC 3501 et
seq. and have been assigned OMB No.
7100-0201.
* Creditors have the option o f continuing to comply with
the previous version o f the regulation until April 1, 1990,
when compliance with this amended version becomes
mandatory.




For the purposes of this regulation, unless the
context indicates otherwise, the following defi­
nitions apply.

Account

(a)
means an extension of credit.
When employed in relation to an account, the
word
refers only to open-end credit.

use
Act means the Equal Credit Opportunity

(b)
Act (title VII of the Consumer Credit Protec­
tion Act).
(c)

Adverse action.

(1) The term means—
(i) a refusal to grant credit in substan­
tially the amount or on substantially the
terms requested in an application unless
the creditor makes a counteroffer (to
grant credit in a different amount or on
other terms) and the applicant uses or
expressly accepts the credit offered;
(ii) a termination of an account or an
unfavorable change in the terms of an ac­
count that does not affect all or a sub­
stantial portion of a class of the creditor’s
accounts; or

1

Regulation B

§ 2 0 2 .2

(iii) a refusal to increase the amount of
credit available to an applicant who has
made an application for an increase.
(2) The term does not include—
(i) a change in the terms of an account
expressly agreed to by an applicant;
(ii) any action or forbearance relating to
an account taken in connection with in­
activity, default, or delinquency as to
that account;
(iii) a refusal or failure to authorize an
account transaction at a point of sale or
loan, except when the refusal is a termi­
nation or an unfavorable change in the
terms of an account that does not affect
all or a substantial portion of a class of
the creditor’s accounts, or when the re­
fusal is a denial of an application for an
increase in the amount of credit available
under the account;
(iv) a refusal to extend credit because
applicable law prohibits the creditor from
extending the credit requested; or
(v) a refusal to extend credit because the
creditor does not offer the type of credit
or credit plan requested.
(3) An action that falls within the defini­
tion of both paragraphs (c )(1 ) and (c )(2 )
of this section is governed by paragraph
(c )(2 ).

Age

(d)
refers only to the age of natural per­
sons and means the number of fully elapsed
years from the date of an applicant’s birth.

Applicant

(e)
means any person who requests
or who has received an extension of credit
from a creditor, and includes any person who
is or may become contractually liable regard­
ing an extension of credit. For purposes of
section 202.7(d), the term includes guaran­
tors, sureties, endorsers and similar parties.

Application

(f)
means an oral or written re­
quest for an extension of credit that is made in
accordance with procedures established by a
creditor for the type of credit requested. The
term does not include the use of an account or
line of credit to obtain an amount of credit
that is within a previously established credit
limit. A
means an appli­
cation in connection with which a creditor has
received all the information that the creditor

completed application

2




regularly obtains and considers in evaluating
applications for the amount and type of credit
requested (including, but not limited to, cred­
it reports, any additional information request­
ed from the applicant, and any approvals or
reports by governmental agencies or other
persons that are necessary to guarantee, in­
sure, or provide security for the credit or col­
lateral). The creditor shall exercise reasonable
diligence in obtaining such information.

Business credit

(g)
refers to extensions of
credit primarily for business or commercial
(including agricultural) purposes, but exclud­
ing extensions of credit of the types described
in section 202.3(a), (b), and (d).

Consumer credit

(h)
means credit extended
to a natural person primarily for personal,
family, or household purposes.

Contractually liable

(i)
means expressly obli­
gated to repay all debts arising on an account
by reason of an agreement to that effect.

Credit

(j)
means the right granted by a credi­
tor to an applicant to defer payment of a debt,
incur debt and defer its payment, or purchase
property or services and defer payment
therefor.

Credit card

(k)
means any card, plate, cou­
pon book, or other single credit device that
may be used from time to time to obtain mon­
ey, property, or services on credit.

Creditor

(/)
means a person who, in the ordi­
nary course of business, regularly participates
in the decision of whether or not to extend
credit. The term includes a creditor’s assignee,
transferee, or subrogee who so participates.
For purposes of sections 202.4 and 202.5(a),
the term also includes a person who, in the
ordinary course of business, regularly refers
applicants or prospective applicants to credi­
tors, or selects or offers to select creditors to
whom requests for credit may be made. A per­
son is not a creditor regarding any violation of
the act or this regulation committed by anoth­
er creditor unless the person knew or had rea­
sonable notice of the act, policy, or practice
that constituted the violation before becoming
involved in the credit transaction. The term
does not include a person whose only partici-

Regulation B
pation in a credit transaction involves honor­
ing a credit card.

Credit transaction

(m)
means every aspect of
an applicant’s dealings with a creditor regard­
ing an application for credit or an existing ex­
tension of credit (including, but not limited
to, information requirements; investigation
procedures; standards of creditworthiness;
terms of credit; furnishing of credit informa­
tion; revocation, alteration, or termination of
credit; and collection procedures).

Discriminate against an applicant

(n)
means
to treat an applicant less favorably than other
applicants.

Elderly means age 62 or older.
(p) Empirically derived and other credit scor­
ing systems.
(1) A credit scoring system is a system that
(o)

evaluates an applicant’s creditworthiness
mechanically, based on key attributes of the
applicant and aspects of the transaction,
and that determines, alone or in conjunc­
tion with an evaluation of additional infor­
mation about the applicant, whether an ap­
plicant is deemed creditworthy. To qualify
as an
the
system must be—
(i) based on data that are derived from
an empirical comparison of sample
groups or the population of creditworthy
and noncreditworthy applicants who ap­
plied for credit within a reasonable pre­
ceding period of time;
(ii) developed for the purpose of evalu­
ating the creditworthiness of applicants
with respect to the legitimate business in­
terests of the creditor utilizing the system
(including, but not limited to, minimiz­
ing bad debt losses and operating expens­
es in accordance with the creditor’s busi­
ness judgment);
(iii) developed and validated using ac­
cepted statistical principles and method­
ology; and
(iv) periodically revalidated by the use
of appropriate statistical principles and
methodology and adjusted as necessary
to maintain predictive ability.
(2) A creditor may use an empirically de­

empirically derived, demonstrably and
statistically sound, credit scoring system,




§ 2 0 2 .2

rived, demonstrably and statistically sound,
credit scoring system obtained from anoth­
er person or may obtain credit experience
from which to develop such a system. Any
such system must satisfy the criteria set
forth in paragraph (p) (1) (i) through (iv)
of this section; if the creditor is unable dur­
ing the development process to validate the
system based on its own credit experience
in accordance with paragraph (p) (1) of
this section, the system must be validated
when sufficient credit experience becomes
available.
A system that fails this validity test is no
longer an empirically derived, demonstra­
bly and statistically sound, credit scoring
system for that creditor.

Extend credit

extension of credit

(q)
and
mean the granting of credit in any form (in­
cluding, but not limited to, credit granted in
addition to any existing credit or credit limit;
credit granted pursuant to an open-end credit
plan; the refinancing or other renewal of cred­
it, including the issuance of a new credit card
in place of an expiring credit card or in substi­
tution for an existing credit card; the consoli­
dation of two or more obligations; or the con­
tinuance of existing credit without any special
effort to collect at or after maturity).

Good faith

(r)
means honesty in fact in the
conduct or transaction.

Inadvertent error

(s)
means a mechanical,
electronic, or clerical error that a creditor
demonstrates was not intentional and oc­
curred notwithstanding the maintenance of
procedures reasonably adapted to avoid such
errors.
(t) Judgmental system of evaluating appli­
cants means any system for evaluating the
creditworthiness of an applicant other than an
empirically derived, demonstrably and statis­
tically sound, credit scoring system.

Marital status

(u)
means the state of being
unmarried, married, or separated, as define*
by applicable state law. The term “unmar­
ried” includes persons who are single, di­
vorced, or widowed.

Negative factor or value,

(v)
in relation to the
age of elderly applicants, means utilizing a

3

Regulation B

§ 2 0 2 .2

factor, value, or weight that is less favorable
regarding elderly applicants than the credi­
tor’s experience warrants or is less favorable
than the factor, value, or weight assigned to
the class of applicants that are not classified as
elderly and are most favored by a creditor on
the basis of age.

Open-end credit

(w)
means credit extended
under a plan under which a creditor may per­
mit an applicant to make purchases or obtain
loans from time to time directly from the
creditor or indirectly by use of a credit card,
check, or other device.

Person

(x)
means a natural person, corpora­
tion, government or governmental subdivision
or agency, trust, estate, partnership, coopera­
tive, or association.

Pertinent element of creditworthiness,

(y)
in
relation to a judgmental system of evaluating
applicants, means any information about ap­
plicants that a creditor obtains and considers
and that has a demonstrable relationship to a
determination of creditworthiness.

Prohibited basis

(z)
means race, color, reli­
gion, national origin, sex, marital status, or
age (provided that the applicant has the ca­
pacity to enter into a binding contract); the
fact that all or part of the applicant’s income
derives from any public assistance program;
or the fact that the applicant has in good faith
exercised any right under the Consumer Cred­
it Protection Act or any state law upon which
an exemption has been granted by the Board.

State

(aa)
means any state, the District of
Columbia, the Commonwealth of Puerto
Rico, or any territory or possession of the
United States.

SE C T IO N 202.3— Limited Exceptions
for Certain Classes of Transactions

Public-utilities credit.

Definition.

(a)
(1)
Public-utilities credit refers to extensions of
credit that involve public-utility services
provided through pipe, wire, or other con­
nected facilities, or radio or similar trans­
mission (including extensions of such facili­
ties), if the charges for service, delayed

4




payment, and any discount for prompt pay­
ment are filed with or regulated by a gov­
ernment unit.
(2)
The following provisions
of this regulation do not apply to publicutilities credit:
(i) section 202.5(d )(1) concerning in­
formation about marital status;
(ii) section 202.10 relating to furnishing
of credit information; and
(iii) section 202.12(b) relating to record
retention.

Exceptions.

Securities credit.

Definition.

(b)
(1)
Securi­
ties credit refers to extensions of credit sub­
ject to regulation under section 7 of the Se­
curities Exchange Act of 1934 or extensions
of credit by a broker or dealer subject to
regulation as a broker or dealer under the
Securities Exchange Act of 1934.
(2)
The following provisions
of this regulation do not apply to securities
credit:
(i) section 202.5(c) concerning infor­
mation about a spouse or former spouse;
(ii) section 202.5(d )(1) concerning in­
formation about marital status;
(iii) section 202.5(d )(3) concerning in­
formation about the sex of an applicant;
(iv) section 202.7(b) relating to desig­
nation of name, but only to the extent
necessary to prevent violation of rules re­
garding an account in which a broker or
dealer has an interest, or rules necessitat­
ing the aggregation of accounts of spous­
es for the purpose of determining
controlling interests, beneficial interests,
beneficial ownership, or purchase limita­
tions and restrictions;
(v) section 202.7(c) relating to action
concerning open-end accounts, but only
to the extent the action taken is on the
basis of a change of name or marital
status;
(vi) section 202.7(d) relating to the sig­
nature of a spouse or other person;
(vii) section 202.10 relating to furnish­
ing of credit information; and
(viii) section 202.12(b) relating to rec­
ord retention.

Exceptions.

Incidental credit.

Definition.

(c)
(1)
Inciden­
tal credit refers to extensions of consumer

Regulation B
credit other than credit of the types de­
scribed in paragraphs (a) and (b) of this
section—
(i) that are not made pursuant to the
terms of a credit card account;
(ii) that are not subject to a finance
charge (as defined in Regulation Z, 12
CFR 226.4); and
(iii) that are not payable by agreement
in more than four installments.
(2) Exceptions. The following provisions
of this regulation do not apply to incidental
credit:
(i) section 202.5(c) concerning infor­
mation about a spouse or former spouse;
(ii) section 202.5(d)(1) concerning in­
formation about marital status;
(iii) section 202.5(d )(2) concerning in­
formation about income derived from ali­
mony, child support, or separate mainte­
nance payments;
(iv) section 202.5(d )(3) concerning in­
formation about the sex of an applicant,
but only to the extent necessary for medi­
cal records or similar purposes;
(v) section 202.7(d) relating to the sig­
nature of a spouse or other person;
(vi) section
202.9
relating
to
notifications;
(vii) section 202.10 relating to furnish­
ing of credit information; and
(viii) section 202.12(b) relating to rec­
ord retention.
(d) Government credit. (1) Definition. Gov­
ernment credit refers to extensions of credit
made to governments or governmental sub­
divisions, agencies, or instrumentalities.
(2) Applicability o f regulation. Except for
section 202.4, the general rule prohibiting
discrimination on a prohibited basis, the re­
quirements of this regulation do not apply
to government credit.

SE C T IO N 202.4— General Rule
Prohibiting Discrimination
A creditor shall not discriminate against an
applicant on a prohibited basis regarding any
aspect of a credit transaction.




§ 202.5
SE C T IO N 202.5— Rules Concerning
Taking o f Applications
(a) Discouraging applications. 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.
(b) General rules concerning requests for
information. (1) Except as provided in para­
graphs (c) and (d) of this section, a credi­
tor may request any information in connec­
tion with an application.1
(2) Required collection o f information.
Notwithstanding paragraphs (c) and (d)
of this section, a creditor shall request in­
formation for monitoring purposes as re­
quired by section 202.13 for credit secured
by the applicant’s dwelling. In addition, a
creditor may obtain information required
by a regulation, order, or agreement issued
by, or entered into with, a court or an en­
forcement agency (including the attorney
general of the United States or a similar
state official) to monitor or enforce compli­
ance with the act, this regulation, or other
federal or state statute or regulation.
(3) Special-purpose credit. A creditor may
obtain information that is otherwise re­
stricted to determine eligibility for a spe­
cial-purpose credit program, as provided in
section 202.8(c) and (d).
(c) Information about a spouse or former
spouse. (1) Except as permitted in this para­
graph, a creditor may not request any infor­
mation concerning the spouse or former
spouse of an applicant.
(2) Permissible inquiries. A creditor may
request any information concerning an ap­
plicant’s spouse (or former spouse under
paragraph ( c ) (2 ) ( v )) that may be request­
ed about the applicant if—
(i) the spouse will be permitted to use
the account;
(ii) the spouse will be contractually lia­
ble on the account;
1 This paragraph does not limit or abrogate any federal
or state law regarding privacy, privileged information,
credit reporting limitations, or similar restrictions on ob­
tainable information.

5

Regulation B

§ 202.5
(iii) the applicant is relying on the
spouse’s income as a basis for repayment
of the credit requested;
(iv) the applicant resides in a communi­
ty property state or property on which
the applicant is relying as a basis for re­
payment of the credit requested is located
in such a state; or
(v) the applicant is relying on alimony,
child support, or separate maintenance
payments from a spouse or former spouse
as a basis for repayment of the credit
requested.
(3) Other accounts o f the applicant. A
creditor may request an applicant to list
any account upon which the applicant is li­
able and to provide the name and address in
which the account is carried. A creditor
may also ask the names in which an appli­
cant has previously received credit.

Other limitations on information requests.
( 1) Marital status. If an applicant applies for

(d)

individual unsecured credit, a creditor shall
not inquire about the applicant’s marital
status unless the applicant resides in a com­
munity property state or is relying on prop­
erty located in such a state as a basis for
repayment of the credit requested. If an ap­
plication is for other than individual unse­
cured credit, a creditor may inquire about
the applicant’s marital status, but shall use
only the terms “married,” “unmarried,”
and “separated.” A creditor may explain
that the category “unmarried” includes sin­
gle, divorced, and widowed persons.
(2) Disclosure about income from alimony,
child support, or separate maintenance. A
creditor shall not inquire whether income
stated in an application is derived from ali­
mony, child support, or separate mainte­
nance payments unless the creditor disclos­
es to the applicant that such income need
not be revealed if the applicant does not
want the creditor to consider it in determin­
ing the applicant’s creditworthiness.
( 3 ) Sex. A creditor shall not inquire about
the sex of an applicant. An applicant may
be requested to designate a title on an appli­
cation form (such as Ms., Miss, Mr., or
Mrs.) if the form discloses that the designa­
tion of a title is optional. An application




form shall otherwise use only terms that are
neutral as to sex.
(4) Childbearing, childrearing. A creditor
shall not inquire about birth control prac­
tices, intentions concerning the bearing or
rearing of children, or capability to bear
children. A creditor may inquire about the
number and ages of an applicant’s depen­
dents or about dependent-related financial
obligations or expenditures, provided such
information is requested without regard to
sex, marital status, or any other prohibited
basis.
(5) Race, color, religion, national origin. A
creditor shall not inquire about the race,
color, religion, or national origin of an ap­
plicant or any other person in connection
with a credit transaction. A creditor may
inquire about an applicant’s permanent res­
idence and immigration status.
(e) Written applications. A creditor shall take
written applications for the types of credit
covered by section 202.13(a) but need not
take written applications for other types of
credit.

S E C T IO N 202.6— Rules Concerning
Evaluation o f Applications
(a)

tion.

General rule concerning use o f informa­

Except as otherwise provided in the act
and this regulation, a creditor may consider
any information obtained, so long as the infor­
mation is not used to discriminate against an
applicant on a prohibited basis.2
(b)

tion.

Specific rules concerning use o f informa­

(1) Except as provided in the act and
this regulation, a creditor shall not take a
prohibited basis into account in any system
of evaluating the creditworthiness of
applicants.
(2) Age, receipt o f public assistance, (i) Ex­
cept as permitted in this paragraph, a
creditor shall not take into account an
applicant’s age (provided that the appli-

2 The legislative history o f the act indicates that the Con­
gress intended an “effects test” concept, as outlined in the
employment field by the Supreme Court in the cases o f
v.
401 U.S. 424 (1 9 7 1 ), and
v.
422 U .S. 405 (1 9 7 5 ), to be
applicable to a creditor’s determination o f creditworthiness.

Griggs Duke Power Co.,
marle Paper Co. Moody,

Albe­

§ 202.7

Regulation B
cant has the capacity to enter into a bind­
ing contract) or whether an applicant’s
income derives from any public assist­
ance program.
(ii) In an empirically derived, demon­
strably and statistically sound, credit
scoring system, a creditor may use an ap­
plicant’s age as a predictive variable, pro­
vided that the age of an elderly applicant
is not assigned a negative factor or value.
(iii) In a judgmental system of evaluat­
ing creditworthiness, a creditor may con­
sider an applicant’s age or whether an ap­
plicant’s income derives from any public
assistance program only for the purpose
of determining a pertinent element of
creditworthiness.
(iv) In any system of evaluating creditworthiness, a creditor may consider the
age of an elderly applicant when such age
is used to favor the elderly applicant in
extending credit.
(3)
In evaluat­
ing creditworthiness, a creditor shall not
use assumptions or aggregate statistics re­
lating to the likelihood that any group of
persons will bear or rear children or will,
for that reason, receive diminished or inter­
rupted income in the future.
(4)
A creditor shall not
take into account whether there is a tele­
phone listing in the name of an applicant
for consumer credit but may take into ac­
count whether there is a telephone in the
applicant’s residence.
(5)
A creditor shall not discount
or exclude from consideration the income
of an applicant or the spouse of an appli­
cant because of a prohibited basis or be­
cause the income is derived from part-time
employment or is an annuity, pension, or
other retirement benefit; a creditor may
consider the amount and probable continu­
ance of any income in evaluating an appli­
cant’s creditworthiness. When an applicant
relies on alimony, child support, or separate
maintenance payments in applying for cred­
it, the creditor shall consider such pay­
ments as income to the extent that they are
likely to be consistently made.
(6)
To the extent that a
creditor considers credit history in evaluat­

Childbearing, childrearing.

Telephone listing.

ing the creditworthiness of similarly quali­
fied applicants for a similar type and
amount of credit, in evaluating an appli­
cant’s creditworthiness a creditor shall con­
sider—
(i) the credit history, when available, of
accounts designated as accounts that the
applicant and the applicant’s spouse are
permitted to use or for which both are
contractually liable;
(ii) on the applicant’s request, any infor­
mation the applicant may present that
tends to indicate that the credit history
being considered by the creditor does not
accurately reflect the applicant’s creditworthiness; and
(iii) on the applicant’s request, the cred­
it history, when available, of any account
reported in the name of the applicant’s
spouse or former spouse that the appli­
cant can demonstrate accurately reflects
the applicant’s creditworthiness.
(7)
A creditor may
consider whether an applicant is a perma­
nent resident of the United States, the ap­
plicant’s immigration status, and any addi­
tional information that may be necessary to
ascertain the creditor’s rights and remedies
regarding repayment.

Immigration status

State property laws.

(c)
A creditor’s consider­
ation or application of state property laws di­
rectly or indirectly affecting creditworthiness
does not constitute unlawful discrimination
for the purposes of the act or this regulation.

Income.

Credit history.




SE C T IO N 202.7— Rules Concerning
Extensions o f Credit

Individual accounts.

(a)
A creditor shall not
refuse to grant an individual account to a
creditworthy applicant on the basis of sex,
marital status, or any other prohibited basis.

Designation of name.

(b)
A creditor shall not
refuse to allow an applicant to open or main­
tain an account in a birth-given first name and
a surname that is the applicant’s birth-given
surname, the spouse’s surname, or a combined
surname.
(c) Action concerning existing open-end ac­
counts. (1) Limitations. In the absence of evi-

7

§ 202.7
dence of the applicant’s inability or unwill­
ingness to repay, a creditor shall not take
any of the following actions regarding an
applicant who is contractually liable on an
existing open-end account on the basis of
the applicant’s reaching a certain age or re­
tiring or on the basis of a change in the
applicant’s name or marital status:
(i) require a reapplication, except as
provided in paragraph ( c )(2 ) of this
section;
(ii) change the terms of the account; or
(iii) terminate the account.
(2) Requiring reapplication. A creditor
may require a reapplication for an open-end
account on the basis of a change in the mar­
ital status of an applicant who is contractu­
ally liable if the credit granted was based in
whole or in part on income of the appli­
cant’s spouse and if information available to
the creditor indicates that the applicant’s
income may not support the amount of
credit currently available.

Signature o f spouse or other person. (1)
Rule for qualified applicant. Except as pro­

(d)

vided in this paragraph, a creditor shall not
require the signature of an applicant’s
spouse or other person, other than a joint
applicant, on any credit instrument if the
applicant qualifies under the creditor’s stan­
dards of creditworthiness for the amount
and terms of the credit requested.
(2) Unsecured credit. If an applicant re­
quests unsecured credit and relies in part
upon property that the applicant owns
jointly with another person to satisfy the
creditor’s standards of creditworthiness, the
creditor may require the signature of the
other person only on the instrument (s)
necessary, or reasonably believed by the
creditor to be necessary, under the law of
the state in which the property is located, to
enable the creditor to reach the property
being relied upon in the event of the death
or default of the applicant.
(3) Unsecured credit— community property
states. If a married applicant requests unse­
cured credit and resides in a community
property state, or if the property upon
which the applicant is relying is located in
such a state, a creditor may require the sig­
8




Regulation B
nature of the spouse on any instrument nec­
essary, or reasonably believed by the credi­
tor to be necessary, under applicable state
law to make the community property avail­
able to satisfy the debt in the event of de­
fault if—
(i) applicable state law denies the appli­
cant power to manage or control suffi­
cient community property to qualify for
the amount of credit requested under the
creditor’s standards of creditworthiness;
and
(ii) the applicant does not have suffi­
cient separate property to qualify for the
amount of credit requested without re­
gard to community property.
(4) Secured credit. If an applicant re­
quests secured credit, a creditor may re­
quire the signature of the applicant’s spouse
or other person on any instrument neces­
sary, or reasonably believed by the creditor
to be necessary, under applicable state law
to make the property being offered as secu­
rity available to satisfy the debt in the event
of default, for example, an instrument to
create a valid lien, pass clear title, waive
inchoate rights, or assign earnings.
(5) Additional parties. If, under a credi­
tor’s standards of creditworthiness, the per­
sonal liability of an additional party is nec­
essary to support the extension of the credit
requested, a creditor may request a cosign­
er, guarantor, or the like. The applicant’s
spouse may serve as an additional party,
but the creditor shall not require that the
spouse be the additional party.
(6) Rights o f additional parties. A creditor
shall not impose requirements upon an ad­
ditional party that the creditor is prohibited
from imposing upon an applicant under this
section.
(e) Insurance. A creditor shall not refuse to
extend credit and shall not terminate an ac­
count because credit life, health, accident, dis­
ability, or other credit-related insurance is not
available on the basis of the applicant’s age.

SE C T IO N 202.8— Special-Purpose
Credit Programs
(a)

Standards for programs.

Subject to the

§ 202.9

Regulation B
provisions of paragraph (b) of this section,
the act and this regulation permit a creditor to
extend special-purpose credit to applicants
who meet eligibility requirements under the
following types of credit programs:
(1) any credit assistance program express­
ly authorized by federal or state law for the
benefit of an economically disadvantaged
class of persons;
(2) any credit assistance program offered
by a not-for-profit organization, as defined
under section 501 (c) of the Internal Reve­
nue Code of 1954, as amended, for the ben­
efit of its members or for the benefit of an
economically disadvantaged class of per­
sons; or
(3) any special-purpose credit program of­
fered by a for-profit organization or in
which such an organization participates to
meet special social needs, if—
(i) the program is established and ad­
ministered pursuant to a written plan
that identifies the class of persons that
the program is designed to benefit and
sets forth the procedures and standards
for extending credit pursuant to the pro­
gram; and
(ii) the program is established and ad­
ministered to extend credit to a class of
persons who, under the organization’s
customary standards of creditworthiness,
probably would not receive such credit or
would receive it on less favorable terms
than are ordinarily available to other ap­
plicants applying to the organization for
a similar type and amount of credit.

tion apply to each of the special-purpose
credit programs described in paragraph (a)
of this section unless modified by this
section.
(2) Common characteristics. A program
described in paragraph (a )(2 ) or (a )(3 ) of
this section qualifies as a special-purpose
credit program only if it was established
and is administered so as not to discrimi­
nate against an applicant on any prohibited
basis; however, all program participants
may be required to share one or more com­
mon characteristics (for example, race, na­




(c) Special rule concerning requests and use
o f information. If participants in a special-pur­
pose credit program described in paragraph
(a) of this section are required to possess one
or more common characteristics (for exam­
ple, race, national origin, or sex) and if the
program otherwise satisfies the requirements
of paragraph (a), a creditor may request and
consider information regarding the common
characteristic(s) in determining the appli­
cant’s eligibility for the program.
(d) Special rule in the case o f financial need.
If financial need is one of the criteria under a
special-purpose program described in para­
graph (a) of this section, the creditor may re­
quest and consider, in determining an appli­
cant’s eligibiltiy for the program, information
regarding the applicant’s marital status; ali­
mony, child support, and separate mainte­
nance income; and the spouse’s financial re­
sources. In addition, a creditor may obtain the
signature of an applicant’s spouse or other
person on an application or credit instrument
relating to a special-purpose program if the
signature is required by federal or state law.

SE C T IO N 202.9— Notifications

(a) Notification o f action taken, ECO A notice,
and statement o f specific reasons. ( 1) When
General appli­ notification is required. A creditor shall no­

Rules in other sections. (1)
cability. All of the provisions of this regula­

(b)

tional origin, or sex) so long as the program
was not established and is not administered
with the purpose of evading the require­
ments of the act or this regulation.

tify an applicant of action taken within—
(i) 30 days after receiving a completed
application concerning the creditor’s ap­
proval of, counteroffer to, or adverse ac­
tion on the application;
(ii) 30 days after taking adverse action
on an incomplete application, unless no­
tice is provided in accordance with para­
graph (c) of this section;
(iii) 30 days after taking adverse action
of an existing account; or
(iv) 90 days after notifying the applicant
of a counteroffer if the applicant does not
expressly accept or use the credit offered.
9

§ 202.9
(2) Content o f notification when adverse
action is taken. A notification given to an
applicant when adverse action is taken shall
be in writing and shall contain: a statement
of the action taken; 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 adminis­
ters compliance with respect to the creditor;
and either—
(i) a statement of specific reasons for the
action taken; or
(ii) a disclosure of the applicant’s right
to a statement of specific reasons within
30 days, if the statement is requested
within 60 days of the creditor’s notifica­
tion. The disclosure shall include the
name, address, and telephone number of
the person or office from which the state­
ment of reasons can be obtained. If the
creditor chooses to provide the reasons
orally, the creditor shall also disclose the
applicant’s right to have them confirmed
in writing within 30 days of receiving a
written request for confirmation from the
applicant.
(3) Notification to business credit appli­
cants. For business credit, a creditor shall
comply with the requirements of this para­
graph in the following manner:
(i) With regard to a business that had
gross revenues of $1,000,000 or less in its
preceding fiscal year (other than an ex­
tension of trade credit, credit incident to
a factoring agreement, or other similar
types of business credit), a creditor shall
comply with paragraphs (a )(1 ) and (2),
except that—
(A ) The statement of the action taken
may be given orally or in writing,
when adverse action is taken;
(B ) Disclosure of an applicant’s right
to a statement of reasons may be given
at the time of application, instead of
when adverse action is taken, provided
the disclosure is in a form the appli­
cant may retain and contains the infor­
mation
required
by
paragraph
(a)(2)(H ) and the ECO A notice spec­
ified in paragraph (b )(1 ) of this
section;
(C) For an application made solely by
10




Regulation B
telephone, a creditor satisfies the re­
quirements of this paragraph by an
oral statement of the action taken and
of the applicant’s right to a statement
of reasons for adverse action.
(ii) With regard to a business that had
gross revenues in excess of $1,000,000 in
its preceding fiscal year or an extension
of trade credit, credit incident to a factor­
ing agreement, or other similar types of
business credit, a creditor shall—
(A ) Notify the applicant, orally or in
writing, within a reasonable time of the
action taken; and
(B ) Provide a written statement of the
reasons for adverse action and the
ECOA notice specified in paragraph
(b )(1 ) of this section if the applicant
makes a written request for the reasons
within 60 days of being notified of the
adverse action.
(b) Form o f ECOA notice and statement o f
specific reasons.
(1) ECOA notice. To satisfy the disclosure
requirements of paragraph (a )(2 ) of this
section regarding section 701(a) of the act,
the creditor shall provide a notice that is
substantially similar to the following:
The federal Equal Credit Opportunity A ct pro­
hibits creditors from discriminating against cred­
it applicants on the basis of race, color, religion,
national origin, sex, m arital status, age (provided
the applicant has the capacity to enter into a
binding c o n tra c t); because all or part of the ap­
plicant’s income derives from any public assist­
ance program ; or because the applicant has in
good faith exercised any right under the C on­
sumer Credit Protection A ct. The federal agency
that administers com pliance with this law con­
cerning this creditor is (nam e and address as
specified by the appropriate agency listed in ap­
pendix A of this regulation).

(2) Statement o f specific reasons. The state­
ment of reasons for adverse action required
by paragraph (a) (2) (i) of this section
must be specific and indicate the principal
reason (s) for the adverse action. State­
ments that the adverse action was based on
the creditor’s internal standards or policies
or that the applicant failed to achieve the
qualifying score on the creditor’s credit
scoring system are insufficient.

Regulation B

§202.10

(c) Incomplete applications. ( 1) Notice alternatives. Within 30 days after receiving an
application that is incomplete regarding
matters that an applicant can complete, the
creditor shall notify the applicant either—
(i) of action taken, in accordance with
paragraph (a) of this section; or
(ii) of the incompleteness, in accordance
with paragraph (c) (2) of this section.
(2) Notice o f incompleteness. If additional
information is needed from an applicant,
the creditor shall send a written notice to
the applicant specifying the information
needed, designating a reasonable period of
time for the applicant to provide the infor­
mation, and informing the applicant that
failure to provide the information requested
will result in no further consideration being
given to the application. The creditor shall
have no further obligation under this sec­
tion if the applicant fails to respond within
the designated time period. If the applicant
supplies the requested information within
the designated time period, the creditor
shall take action on the application and no­
tify the applicant in accordance with para­
graph (a) of this section.
(3) Oral request for information. At its op­
tion, a creditor may inform the applicant
orally of the need for additional informa­
tion; but if the application remains incom­
plete the creditor shall send a notice in ac­
cordance with paragraph (c )(1 ) of this
section.
(d) Oral notifications by small-volume credi­
tors. The requirements of this section (includ­
ing statements of specific reasons) are satisfied
by oral notifications in the case of any creditor
that did not receive more than 150 applica­
tions during the preceding calendar year.
(e) Withdrawal o f approved application.
When an applicant submits an application and
the parties contemplate that the applicant will
inquire about its status, if the creditor ap­
proves the application and the applicant has
not inquired within 30 days after applying, the
creditor may treat the application as with­
drawn and need not comply with paragraph
(a )(1 ) of this section.
(f)

Multiple applicants.




When an application

involves more than one applicant, notification
need only be given to one of them but must be
given to the primary applicant where one is
readily apparent.
(g)

party.

Applications submitted through a third

When an application is made on behalf
of an applicant to more than one creditor and
the applicant expressly accepts or uses credit
offered by one of the creditors, notification of
action taken by any of the other creditors is
not required. If no credit is offered or if the
applicant does not expressly accept or use any
credit offered, each creditor taking adverse ac­
tion must comply with this section, directly or
through a third party. A notice given by a
third party shall disclose the identity of each
creditor on whose behalf the notice is given.

SE C T IO N 202.10— Furnishing o f Credit
Information
(a) Designation o f accounts. A creditor that
furnishes credit information shall designate—
(1) any new account to reflect the partici­
pation of both spouses if the applicant’s
spouse is permitted to use or is contractual­
ly liable on the account (other than as a
guarantor, surety, endorser, or similar par­
ty); and
(2) any existing account to reflect such
participation, within 90 days after receiving
a written request to do so from one of the
spouses.
(b) Routine reports to consumer reporting
agency. If a creditor furnishes credit informa­
tion to a consumer reporting agency concern­
ing an account designated to reflect the partic­
ipation of both spouses, the creditor shall
furnish the information in a manner that will
enable the agency to provide access to the in­
formation in the name of each spouse.
(c) Reporting in response to inquiry. If a cred­
itor furnishes credit information in response
to an inquiry concerning an account designat­
ed to reflect the participation of both spouses,
the creditor shall furnish the information in
the name of the spouse about whom the infor­
mation is requested.

1
1

Regulation B

§202.11
SE C T IO N 202.11— Relation to State
Law
(a) Inconsistent state laws. Except as other­
wise provided in this section, this regulation
alters, affects, or preempts only those state
laws that are inconsistent with the act and this
regulation and then only to the extent of the
inconsistency. A state law is not inconsistent
if it is more protective of an applicant.
(b) Preempted provisions o f state law. (1) A
state law is deemed to be inconsistent with
the requirements of the act and this regula­
tion and less protective of an applicant
within the meaning of section 7 0 5 (0 of the
act to the extent that the law—
(i) requires or permits a practice or act
prohibited by the act or this regulation;
(ii) prohibits the individual extension of
consumer credit to both parties to a mar­
riage if each spouse individually and vol­
untarily applies for such credit;
(iii) prohibits inquiries or collection of
data required to comply with the act or
this regulation;
(iv) prohibits asking or considering age
in an empirically derived, demonstrably
and statistically sound, credit scoring sys­
tem to determine a pertinent element of
creditworthiness, or to favor an elderly
applicant; or
(v) prohibits inquiries necessary to es­
tablish or administer a special-purpose
credit program as defined by section

202. 8.
(2) A creditor, state, or other interested
party may request the Board to determine
whether a state law is inconsistent with the
requirements of the act and this regulation.
(c) Laws on finance charges, loan ceilings. If
married applicants voluntarily apply for and
obtain individual accounts with the same
creditor, the accounts shall not be aggregated
or otherwise combined for purposes of deter­
mining permissible finance charges or loan
ceilings under any federal or state law. Per­
missible loan ceiling laws shall be construed to
permit each spouse to become individually lia­
ble up to the amount of the loan ceilings, less
the amount for which the applicant is jointly
liable.

1
2



(d) State and federal laws not affected. This
section does not alter or annul any provision
of state property laws, laws relating to the dis­
position of decedents’ estates, or federal or
state banking regulations directed only
toward insuring the solvency of financial
institutions.
(e) Exemption for state-regulated transac­
tions. (1) Applications. A state may apply to
the Board for an exemption from the re­
quirements of the act and this regulation for
any class of credit transactions within the
state. The Board will grant such an exemp­
tion if the Board determines that—
(i) the class of credit transactions is sub­
ject to state law requirements substantial­
ly similar to the act and this regulation or
that applicants are afforded greater pro­
tection under state law; and
(ii) there is adequate provision for state
enforcement.
(2) Liability and enforcement, (i) No ex­
emption will extend to the civil-liability
provisions of section 706 or the adminis­
trative-enforcement provisions of section
704 of the act.
(ii) After an exemption has been grant­
ed, the requirements of the applicable
state law (except for additional require­
ments not imposed by federal law) will
constitute the requirements of the act and
this regulation.

SE C T IO N 202.12— Record Retention
(a) Retention o f prohibited information. A
creditor may retain in its files information that
is prohibited by the act or this regulation in
evaluating applications, without violating the
act or this regulation, if the information was
obtained—
(1) from any source prior to March 23,
1977;
(2) from consumer reporting agencies, an
applicant, or others without the specific re­
quest of the creditor; or
(3) As required to monitor compliance
with the act and this regulation or other
federal or state statutes or regulations.
(b)

Preservation o f records.

(1)

Applications.

Regulation B
For 25 months (12 months for business
credit) after the date that a creditor notifies
an applicant of action taken on an applica­
tion or of incompleteness, the creditor shall
retain in original form or a copy thereof—
(i) any application that it receives, any
information required to be obtained con­
cerning characteristics of the applicant to
monitor compliance with the act and this
regulation or other similar law, and any
other written or recorded information
used in evaluating the application and
not returned to the applicant at the appli­
cant’s request;
(ii) a copy of the following documents if
furnished to the applicant in written form
(or, if furnished orally, any notation or
memorandum made by the creditor):
(A ) the notification of action taken;
and
(B ) the statement of specific reasons
for adverse action; and
(iii) any written statement submitted by
the applicant alleging a violation of the
act or this regulation.
(2) Existing accounts. For 25 months (12
months for business credit) after the date
that a creditor notifies an applicant of ad­
verse action regarding an existing account,
the creditor shall retain as to that account,
in original form or a copy thereof—
(i) any written or recorded information
concerning the adverse action; and
(ii) any written statement submitted by
the applicant alleging a violation of the
act or this regulation.
(3) Other applications. For 25 months (12
months for business credit) after the date
that a creditor receives an application for
which the creditor is not required to com­
ply with the notification requirements of
section 202.9, the creditor shall retain all
written or recorded information in its pos­
session concerning the applicant, including
any notation of action taken.
(4) Enforcement proceedings and investiga­
tions. A creditor shall retain the informa­
tion specified in this section beyond 25
months (12 months for business credit) if it
has actual notice that it is under investiga­
tion or is subject to an enforcement pro­
ceeding for an alleged violation of the act or




§202.13
this regulation by the attorney general of
the United States or by an enforcement
agency charged with monitoring that credi­
tor’s compliance with the act and this regu­
lation, or if it has been served with notice of
an action filed pursuant to section 706 of
the act and section 202.14 of this regula­
tion. The creditor shall retain the informa­
tion until final disposition of the matter, un­
less an earlier time is allowed by order of
the agency or court.
(5) Special rule for certain business-credit
applications. With regard to a business with
gross revenues in excess of $1,000,000 in its
preceding fiscal year, or an extension of
trade credit, credit incident to a factoring
agreement or other similar types of business
credit, the creditor shall retain records for
at least 60 days after notifying the applicant
of the action taken. If within that time peri­
od the applicant requests in writing the rea­
sons for adverse action or that records be
retained, the creditor shall retain records
for 12 months.

SE C T IO N 202.13— Information for
M onitoring Purposes
(a) Information to be requested. A creditor
that receives an application for credit primari­
ly for the purchase or refinancing of a
dwelling occupied or to be occupied by the
applicant as a principal residence, where the
extension of credit will be secured by the
dwelling, shall request as part of the applica­
tion the following information regarding the
applicant (s):
(1) race or national origin, using the cate­
gories American Indian or Alaskan Native;
Asian or Pacific Islander; Black; White;
Hispanic; Other (Specify);
(2) sex;
(3) marital status, using the categories
Married, Unmarried, and Separated; and
(4) age.
“Dwelling” means a residential structure that
contains one to four units, whether or not that
structure is attached to real property. The
term includes, but is not limited to, an indi­
vidual condominium or cooperative unit, and
a mobile or other manufactured home.

13

§202.13
(b) Obtaining o f information. Questions re­
garding race or national origin, sex, marital
status, and age may be listed, at the creditor’s
option, on the application form or on a sepa­
rate form that refers to the application. The
applicant(s) shall be asked but not required
to supply the requested information. If the ap­
plicant (s) chooses not to provide the informa­
tion or any part of it, that fact shall be noted
on the form. The creditor shall then also note
on the form, to the extent possible, the race or
national origin and sex of the applicant (s) on
the basis of visual observation or surname.
(c) Disclosure to applicant(s). The creditor
shall inform the applicant(s) that the infor­
mation regarding race or national origin, sex,
marital status, and age is being requested by
the federal government for the purpose of
monitoring compliance with federal statutes
that prohibit creditors from discriminating
against applicants on those bases. The creditor
shall also inform the applicant(s) that if the
applicant(s) chooses not to provide the infor­
mation, the creditor is required to note the
race or national origin and sex on the basis of
visual observation or surname.
(d) Substitute monitoring program. A moni­
toring program required by an agency
charged with administrative enforcement un­
der section 704 of the act may be substituted
for the requirements contained in paragraphs
(a), (b), and (c).

SE C T IO N 202.14— Enforcement,
Penalties, and Liabilities
(a) Administrative enforcement. (1) As set
forth more fully in section 704 of the act,
administrative enforcement of the act and
this regulation regarding certain creditors is
assigned to the Comptroller of the Curren­
cy, Board of Governors of the Federal Re­
serve System, board of directors of the Fed­
eral Deposit Insurance Corporation, Office
of Thrift Supervision, National Credit Un­
ion Administration, Interstate Commerce
Commission, secretary of agriculture, Farm
Credit Administration, Securities and Ex­
change Commission, Small Business
14




Regulation B
Administration,
and
secretary
of
transportation.
(2) Except to the extent that administra­
tive enforcement is specifically assigned to
other authorities, compliance with the re­
quirements imposed under the act and this
regulation is enforced by the Federal Trade
Commission.
(b) Penalties and liabilities. (1) Sections
706(a) and (b) and 702(g) of the act pro­
vide that any creditor that fails to comply
with a requirement imposed by the act or
this regulation is subject to civil liability for
actual and punitive damages in individual
or class actions. Pursuant to sections
704(b), (c), and (d) and 702(g) of the act,
violations of the act or regulation also con­
stitute violations of other federal laws. Lia­
bility for punitive damages is restricted to
nongovernmental entities and is limited to
$10,000 in individual actions and the lesser
of $500,000 or 1 percent of the creditor’s
net worth in class actions. Section 706(c)
provides for equitable and declaratory relief
and section 706(d) authorizes the awarding
of costs and reasonable attorney’s fees to an
aggrieved applicant in a successful action.
(2) As provided in section 706(f), a civil
action under the act or this regulation may
be brought in the appropriate United States
district court without regard to the amount
in controversy or in any other court of com­
petent jurisdiction within two years after
the date of the occurrence of the violation,
or within one year after the commencement
of an administrative enforcement proceed­
ing or of a civil action brought by the attor­
ney general of the United States within two
years after the alleged violation.
(3) Sections 706(g) and (h) provide that,
if an agency responsible for administrative
enforcement is unable to obtain compliance
with the act or this regulation, it may refer
the matter to the attorney general of the
United States. On referral, or whenever the
Attorney General has reason to believe that
one or more creditors are engaged in a pat­
tern or practice in violation of the act or
this regulation, the attorney general may
bring a civil action.
(c)

Failure o f compliance. A creditor’s failure

Appendix B

Regulation B
to comply with sections 202.6(b)(6), 202.9,
202.10, 202.12 or 202.13 is not a violation if it
results from an inadvertent error. On discov­
ering an error under sections 202.9 and
202.10, the creditor shall correct it as soon as
possible. If a creditor inadvertently obtains
the monitoring information regarding the race
or national origin and sex of the applicant in a
dwelling-related transaction not covered by
section 202.13, the creditor may act on and
retain the application without violating the
regulation.

A P P E N D IX A— Federal Enforcement
Agencies
The following list indicates the federal agen­
cies that enforce Regulation B for particular
classes of creditors. Any questions concerning
a particular creditor should be directed to its
enforcement agency.

National Banks
Comptroller of the Currency
Consumer Examinations Division
Washington, D.C. 20219

State Member Banks
Federal Reserve Bank serving the District in
which the state member bank is located.

Air Carriers
Assistant General Counsel for Aviation En­
forcement and Proceedings
Department of Transportation
400 Seventh Street, S.W.
Washington, D.C. 20590

Creditors Subject to Interstate Commerce
Commission
Office of Proceedings
Interstate Commerce Commission
Washington, D.C. 20523

Creditors Subject to Packers and Stockyards
Act
Nearest Packers and Stockyards Administra­
tion area supervisor.

Small Business Investment Companies
U.S. Small Business Administration
1441 L Street, N.W.
Washington, D.C. 20416

Brokers and Dealers
Securities and Exchange Commission
Washington, D.C. 20549

Federal Land Banks, Federal Land Bank
Associations, Federal Intermediate Credit
Banks, and Production Credit Associations

Nonmember Insured Banks

Farm Credit Administration
1501 Farm Credit Drive
McLean, Virginia 22102-5090

Federal Deposit Insurance Corporation Re­
gional Director for the region in which the
nonmember insured bank is located.

Retailers, Finance Companies, and All Other
Creditors Not Listed Above

Savings institutions under the Savings
Association Insurance Fund o f the FDIC and
federally chartered savings banks insured
under the Bank Insurance Fund o f the FDIC
(but not including state-chartered savings
banks insured under the Bank Insurance
Fund)
The district director of the Office of Thrift Su­
pervision in the district in which the institu­
tion is located.

Federal Credit Unions
Regional office of the National Credit Union
Administration serving the area in which the
federal credit union is located.




FTC regional office for region in which the
creditor operates or
Federal Trade Commission
Equal Credit Opportunity
Washington, D.C. 20580

A P P E N D IX B— Model Application
Form s
This appendix contains five model credit ap­
plication forms, each designed for use in a
particular type of consumer credit transaction
as indicated by the bracketed caption on each
form. The first sample form is intended for use
in open-end, unsecured transactions; the sec15

Appendix B
ond for closed-end, secured transactions; the
third for closed-end transactions, whether
unsecured or secured; the fourth in transac­
tions involving community property or occur­
ring in community property states; and the
fifth in residential mortgage transactions. The
appendix also contains a model disclosure for
use in complying with section 202.13 for cer­
tain dwelling-related loans. All forms con­
tained in this appendix are models; their use
by creditors is optional.
The use or modification of these forms is
governed by the following instructions. A
creditor may change the forms by asking for
additional information not prohibited by sec­
tion 202.5; by deleting any information re­
quest; or by rearranging the format without
modifying the substance of the inquiries. In
any of these three instances, however, the ap­
propriate notices regarding the optional na­
ture of courtesy titles; the option to disclose
alimony, child support, or separate mainte­
nance; and the limitation concerning marital
status inquiries must be included in the appro­
priate places if the items to which they relate
appear on the creditor’s form.
If a creditor uses an appropriate appendix B
model form, or modifies a form in accordance
with the above instructions, that creditor shall
be deemed to be acting in compliance with the
provisions of paragraphs (c) and (d) of sec­
tion 202.5 of this regulation.

16




Regulation B

Appendix B

Regulation B
[Open-end, unsecured credit]

CREDIT APPLICATION
IMPORTANT: Read these Directions before completing this Application.
Check
Appropriate
Box

□
□
□

If you are applying for an individual account in your own name and are relying on your own income or
assets and not the income or assets of another person as the basis for repayment of the credit requested,
complete only Sections A and D.
If you are applying for a joint account or an account that you and another person will use. complete
all Sections, providing information in B about the joint applicant or user.
If you are applying for an individual account, but are relying on income from alimony, child support, or
separate maintenance or on the income or assets of another person as the basis for repayment of the credit
requested, complete all Sections to the extent possible, providing information in B about the person on whose
alimony, support, or maintenance payments or income or assets you are relying.

SECTION A—INFORMATION REGARDING APPLICANT
Full Name (Last, First, Middle):

Birthdate:

Present Street Address:

Years there:

Social Security No.:

Driver’s License No.:

Previous Street Address:

Years there:

City:

State:

.........

Zip:

Present Employer:

Years there:

Telephone:

Name of supervisor:
Previous Employer:

Years there:

Present net salary or commission: $

per

. No. Dependents:

Ages:

Alimony, child support, or separate maintenance income need not be revealed if you do not wish to have it considered as a basis
for repaying this obligation.
Alimony, child support, separate maintenance received under: court order □ written agreement G oral understanding G
Other income: $

. Source(s) of other income:

per

Is any income listed in this Section likely to be reduced in the next two years?
Q Yes (Explain in detail on a separate sheet.) No G
Have you ever received credit from us?

When?

Office:

Checking Account No.:

Institution and Branch:

Savings Account No.:

Institution and Branch:

Name of nearest relative
not living with you:
Relationship:

Telephone: .....................................
Address:

SECTION B—INFORMATION REGARDING JOINT APPLICANT. USER, OR OTHER PARTY (Use separate sheets if necessary.)
Full Name (Last, First, Middle):

Birthdate:

/

/

Relationship to Applicant (if any):
Present Street Address:

Years there:

City:

State:

Zip:

Social Security No.:

Telephone:

Driver's License No.:

Present Employer:

Years there:

Position or title:

Name of supervisor:

Employer’s A d d re s s :....................

Telephone:
...................- .................

............................................

Previous Employer:

Years there:

Previous Employer’s Address:
Present net salary or commission: $

per

. No. Dependents:

Ages:_______________________ _

Alimony, child support, or separate maintenance income need not be revealed if you do not wish to have it considered as a basis
for repaying this obligation.
Alimony, child support, separate maintenance received under: court order G written agreement Q oral understanding G______
Other income: $

per

. Source(s) of other income:

Is any income listed in this Section likely to be reduced in the next two years?
G Yes (Explain in detail on a separate sheet.) Q No
Checking Account No.:

Institution and Branch:

Savings Account No.:

............................... Institution and Branch:

Name of nearest relative not living
with Joint Applicant, User, or Other Party: ................................................................................................ Telephone:
Relationship:

Address:

...........................................................................................

SECTION C—MARITAL STATUS
(Do not complete if this is an application for an individual account.)
Applicant: Q Married
Q Separated
Q Unmarried (including single, divorced, and widowed)
Other Party: □ Married
Q Separated
Q Unmarried (including single, divorced, and widowed)




17

Regulation B

Appendix B

SECTION D—ASSET AND DEBT INFORMATION (If Section B has been completed, this Section should be completed giving
information about both the Applicant and Joint Applicant, User, or Other Person. Please mark Applicant-related
information with an “A.” If Section B was not completed, only give information about the Applicant in this Section.)
ASSETS OWNED (Use separate sheet if necessary.)
Value

Description of Assets
Cash

Subject to Debt?
Yes/No

Name(s) of Owner(s)

$

Automobiles (Make. Model, Year)

Cash Value of Life Insurance (Issuer,
Face Value)
Real Estate (Location, Date Acquired)

Marketable Securities (Issuer, Type, No. of Shares)

Other (Lift)

Total Assets

$

OUTSTANDING DEBTS (Include charge accounts, instalment contracts, credit cards.
rent, mortgages, etc. Use separate sheet if necessary.)
Creditor
1. (Landlord or
Mortgage Holder)

Type of Debt
or Acct. No.
□ Rent Payment
□ Mortgage

Name in Which
Acct. Carried

Original
Present
Monthly
Debt
Payments
Balance
$ (Omit rent) S (Omit rent) *

P;«st Due?
Yes/No

i.
i.
4.
s.
c
t

$

$

Total Debt*
(Credit References)

Date Paid

-------------------------------------------------- 1-----------------------------------

\

2.
Are you a co-maker, endorser, or
If “yes”
guarantor on any loan or contract?
Yes □
No □
for whom?_______________________ To whom?____________
Are there any unsatisfied
Yes □
If “yes”
judgments against you?____________ No (j______Amount $_____________________to whom owed?______________________
Have you been declared
Yes Q
If “yes”
bankrupt in the last 14 years?______ No □ ______ where?_______________________________________________Year_______
Other Obligations—(E.g., liability to pay alimony, child support, separate maintenance. Use separate sheet if necessary.)

Everything that I have stated in this application is correct to the best of my knowledge. I understand that you will retain
this application whether or not it is approved. You are authorized to check my credit and employment history and to answer ques­
tions about your credit experience with me.

Applicant’s Signature

18




Date

Other Signature
(Where Applicable)

Date

Regulation B

Appendix B

[Closed-end, secured credit]

CREDIT APPLICATION
IMPORTANT: Read these Directions before completing this Application.
If you are applying for individual credit in your own name and are relying on your own income or assets
and not the income or assets of another person as the basis for repayment of the credit requested, complete
Sections A, C, D. and E, omitting B and the second part of C.
If this is an application for joint credit with another person, complete all Sections, providing information
in B about the joint applicant.
If you arc applying for individual credit, but are relying on income from alimony, child support, or sepa­
rate maintenance or on the income or assets of another person as the basis for repayment of the credit
requested, complete all Sections to the extent possible, providing information in B about the person on
whose alimony, support, or maintenance payments or income or assets you are relying.

□

Check
Appropriate
Box

□
□

Amount Requested

Payment Date Desired

Proceeds of Credit

To be Used For......................................................................................................................
$................................
SECTION A—INFORMATION REGARDING APPLICANT
Full Name (Last, First, Middle): ...................................................................................................................................
Present Street Addtess:

Birthdate:

/

/

Years there:

Present net salary or commission: $
A rs
Alimony, child support, or separate maintenance income need not be revealed If you do not wish to have it considered as a basis
for repaying this obligation.
Alimony, child support, separate maintenance received under: court order □ written agreement □ oral understanding □
per ............................ . Source(s) of other income:

Other income: S

Is any income listed in this Section likely to be reduced before the credit requested is paid off?
□ Yes (Explain in detail on a separate sheet.) No □
Have you ever received credit from us?
When?
Office:
Checking Account No.................................................................

Institution and Branch:

Savings Account No.
..........................................................
Institution and Branch:
Name of nearest relative
not living with you: ........................................................................................................................................
Relationship:

.......

Telephone: ................................

Address:

SECTION B—INFORMATION REGARDING JOINT APPLICANT OR OTHER PARTY (Use separate sheets if necessary.)
Full Name (Last, First, Middle): ................................................................................................

Birthdate:

Relationship to Applicant (if any): ......................................................................................................................
Present Street Address:
City:

/

Years there:
.................................

State: .....................

Social Security No.:
Present Employer:

/

...............

Zip

Telephone:

Driver’s License No.:
............................................ ................................

Position or title: ................................................................................
Employer’s Address:

Years there:

Telephone:

Name of supervisor: .....................- ......................................................

................................................................................................................................................................................................

Previous Employer: .............................................................................................................................................................
Previous Employer’s Address: ................................................................................... ..................................

Years there: ............
..........................................

Present net salary or commission: S____________per____________. No. Dependents:___________ Ages:____________________________
Alimony, child support, or separate maintenance income need not be revealed If yon do not wish to have it considered as a basis
for repaying this obligation.
Alimony, child support, separate maintenance received under: court order Q written agreement fj oral understanding □
Other income: S .........................

per ............................. Source(s) of other income:

Is any income listed in this Section likely to be reduced before the credit requested is paid off?
□ Yes (Explain in detail on a separate sheet.) No □
Checking Account No.: ...................................................
Name of nearest relative not living with Joint
Brl'ilinmhin
SECTION C—MARITAL STATUS
Applicant: □ Married
□ Separated
Other Party: □ Married
□ Separated




□ Unmarried (including single, divorced, and widowed)
□ Unmarried (including single, divorced, and widowed)

19

Appendix B

Regulation B

SECTION D—ASSET AND DEBT INFORMATION (If Section B has been completed, this Section should be completed giving
information about both the Applicant and Joint Applicant or Other Person. Please mark Anplicant-related informa­
tion with an "A.” If Section B was not completed, only give information about the Applicant in this Section.)
ASSETS OWNED (Use separate sheet if necessary.)
Description of Assets

Value

Cash

Subject to Debt?
Yes No

Name(s) of Owner(s)

J

Automobiles (Make. Model, Year)

Cash Value of Life Insurance (Issuer.
Face Value)
Real Estate (Location, Date Acquired)

Marketable Securities (Issuer, Type, No. of Shares)

Other (List)
Total Assets
S
OUTSTANDING DEBTS (Include charge accounts, instalment contracts, credit cards, rent, mortgages, etc
necessary.)
Creditor
1. (Landlord or
Mortgage Holder)

Type of Debt
or Acer No.
□ Rent Payment
□ Mortgage

Name in Which
Acct. Carried

Use separate sheet if

Original
Present
Monthly
Debt
Balance
Payments
$ (Omit rent) $ (Omit rent) $

Past Due?
Yes No

2.
3.
S

$

$

Total Debts
(Credit References)

Date Paid

1.

$

T
Are you a co-maker, endorser, or
guarantor on any loan or contract'7
Yes □
Yes □
Are there any unsatisfied
No □
judgments against you?
Have you been declared
Yes n
bankrupt in the last 14 years?
No □

No O

If “yes”
for whom?

Amount $
If "yes”
where?

To whom?
If “yes”
to whom owed'7
Year

Other obligations—(E.g., liability to pay alimony. child support, separate maintenance. Use separate sheet if necessary.)

SECTION E—SECURED CREDIT Briefly describe the property to be given as security:

and list names and addresses of all co-owners of the property:
Name

Address

If the security is real estate, give the full name of your spouse (if any):
Everything th*t I have stated in this application is correct to the best of my knowledge I understand that you will retain
this application wnether or not it is approved. You are authorized to check my credit and employment history and to answer ques­
tions about yout credit experience with me.

Applicant’s Signature

20




Date

Other Signature
(Where Applicable)

Date

Appendix B

Regulation B

[Closed-end, unsecured/secured credit]
CREDIT APPLICATION
IMPORTANT: Read these Directions before completing this Application.
ire applying for individual credit in your own name and are relying on your own income or assets
the income or assets of another person as the basis for repayment of the credit requested, complete only Sections A and D. '* * “ requested credit
If the
“■
* be secured, also complete the first part of
Section C and Section E.
If you are applying for joint credit with another person, complete all Sections except E. providing informa­
tion in B about the joint applicant. If the requested credit is to be secured, then complete Section E.
If you are applying for individual credit, but are relying on income from alimony, child support, or sepa­
rate maintenance or on the income or assets of another person as the basis for repayment of the credit
requested, complete all Sections except E to the extent possible, providing information in B about the
person on whose alimony, support, or maintenance payments or income or assets you are relying If the
requested credit is to be secured, then complete Section E.
Amount Requested

Payment Date Desired

Proceeds of Credit
To be Used For

SECTION A—INFORMATION REGARDING APPLICANT
Full Name (Last, First, Middle): ........................................ .................................................................

Birthdate:

Present Street Address: ....... -......................................................................................................................................

Years there:

City:

State:

Zip:

Social Security No.:

Telephone:

Driver’s License No.:

/
.........

................. ...........................

.............................................................

Previous Street Address:
City:

/

Years there:

....................... .......... ............

State: .......................

Zip:

Present Employer:

Years there:

Position or title: ....................-.......................................................

Name of supervisor:

Telephone:
.................................................................

Employer's Address:

..................................................................................................................................................................................... *..........

Previous Employer:

........................................................................................................................................................

Previous Employer’s Address:

Years there:

..............................

Present net salary or commission: $____________per____________. No. Dependents:___________ Ages:________________
Alimony, child support, or separate maintenance income need not be revealed If you do not wish to have it considered as a basis
for repaying this obligation.
Alimony, child support, separate maintenance received under: court order □ written agreement □ oral understanding □
Other income: $
per
. Source*s> of other income:
Is any income listed in this Section likely to be reduced before the credit requested is paid off?
□ Yes (Explain in detail on separate sheet.)
Have you ever received credit from us?

□ No
When?

Office

Checking Account No.:

Institution and Branch:

Savings Account No.:

Institution and Branch:

Name of nearest relative
not living with you:

......................................................................
...........................................................
Telephone:

Relationship:

...............................

Address:

....................

SECTION B—INFORMATION REGARDING JOINT APPLICANT OR OTHER PARTY (Use separate sheets if necessary.)
F u ll N am e (L a st, F irs t, M id d le):

....................................................................................................................................................

B irth d ate :

/

/

Relationship to Applicant (if any): ....................................................................................................
Present Street Address: ......................................................................................................................................................
City:

State: ....................

Social Security No.:

......................................................

Present Employer:
Position or title:

Zip:
Driver’s License No.:

Telephone:

................

Name of supervisor:

............

Employer’s Address:
Previous Employer:

.........

......................................................

Years there:
............................................................

Years there:

Telephone:

................
........................................................................ ................................................................................ Years there:

Previous Employer’s Address: ......................

.........

.....................

Present net salary or commission: S..................... per ...................... No. Dependents: .................. Ages: ......................................................
Alimony, child support, or separate maintenance income need not be revealed If you do not wish to have it considered as a basis
for repaying this obligation.
Alimony, child support, separate maintenance received under: court order □ written agreement □ oral understanding □
Other income: $

per

. Source(s) of other income:

..............................................................................

Is any income listed in this Section likely to be reduced before the credit requested is paid off?
□ Yes (Explain in detail on separate sheet.)

□ No

Checking Account No.: ........................................................................... Institution and Branch:

.......................

Savings Account No.: ........................................ ................................... Institution and Branch:

...............................

Name of nearest relative not living with
Joint Applicant or Other Party: ...................................................................................................................... Telephone:
Relationship: ...................................................................................................................... Address:




.................................

2
1

Regulation B

Appendix B

SECTION C—MARITAL STATUS
(Do not complete If this is an application for individual unsecured credit.)
Applicant □ Married
□ Separated
C Unmarried (including single, divorced, and widowed)
Other Party: □ Married
□ Separated
□ Unmarried (including single, divorced, and widowed)
SECTION D—ASSET AND DEBT INFORMATION (If Section B has been completed, (his Section should be completed giving
information about both the Applicant and Joint Applicant or Other Person Please mark Applicant-related information
with an "A.” If Section B was not completed, only give information about the Applicant in this Section.)
ASSETS OWNED (Use separate sheet if necessary.)
Value
$

Description of Assets
Cash

Subject to Debt?
Yes/No

Name(s) of Owner(s)

Automobiles (Make, Model, Year)

Cash Value of Life Insurance (Issuer,
Face Value)
Real Estate (Location, Date Acquired)

Marketable Securities (Issuer, Type. No. of Shares)

Other (List)

Total Assets

$

OUTSTANDING DEBTS (Include charge accounts, instalment contracts, credit cards, rent, mortgages, etc. Use separate sheet if
necessary.)
Original
Present
Monthly
Past Due°
Type of Debt
Name in Which
Debt
Balance
Payments
or Acct. No.
Acct. Carried
Yes No
Creditor
C Rent Payment
$ (Omit rent) $ (Omit rent) %
1. (Landlord or
□ Mortgage
Mortgage Holder)
i -------------------------------------3.

1

Total Debts

i

s

(Credit References)
t.------------------------------------------------------------------------------------------------------T

Date Paid

r
Are you a co-maker, endorser, or
If "Yes.”
guarantor on any loan or contract?
Yes □
No □
for whom?_______________________ To whom?_______
Are there any unsatisfied
Yes D
If “Yes.”
judgments against you0____________ No [________Amount S____________________ to whom owed0_________________
Have you been declared
Yes □
If "Yes.”
bankrupt in the last 14 years?______ No □ _______ where0________________________________________________ Year
Other obligations—(Eg., liability to pay alimony, child support, separate maintenance Use separate sheet if necessary.)

SECTION E—SECURED CREDIT (Complete only if credit is to be secured.) Briefly describe the property to be given as security:

and list names and addresses of all co-owners of the property:
Name

Address

If the security is real estate, give the full name of your spouse (if any):
Everything that I have stated in this application is correct to the best of my knowledge I understand that you will retain
this application whether or not it is approved You are authorized to check my credit and employment history and to answer ques­
tions about your credit experience with me.

Applicant’s Signature

22



Date

Other Signature
(Where Applicable)

Date

Regulation B

Appendix B

[Community property]
CREDIT APPLICATION
IMPORTANT: Read these Directions before completing this Application.
Check
Appropriate
Box

□

If you are applying for individual credit in your own name, are not married, and are not relying on alimony,
child support, or separate maintenance payments or on the income or assets of another person as the basis
for repayment of the credit requested, complete only Sections A and D. If the requested credit is to be
secured, also complete Section E.
In all other situations, complete all Sections except E. providing information in B about your spouse, a
joint applicant or user, or the person on whose alimony, support, or maintenance payments or income or
assets you are relying. If the requested credit is to be secured, also complete Section E.

□

Amount Requested
$...............................

Payment Date Desired
..........................................

Proceeds of Credit
To be Used For

SECTION A—INFORMATION REGARDING APPLICANT
Full Name (Last, First, Middle): ........................................................................................................................................

Birthdate:

Present Street Address .............................................................................................................................................................. Years there:
City: ......................................... -.....................

State: ...............................

Social Security No.: ............................................... ...............................
Previous Street Address:

Telephone: .....................................

................................................................................................................................................. Years there:

City: .................................................................. State: ..............................
Present Employer:

Zip:

Driver’s License No.: ........................................................ .....

........................................................................

Zip: .............................

Years there:

Telephone:

.................................

Position or title: ....................................................................................Name of supervisor: ...................................................................
Employer's Address: .............. ............................................................................................................................................... ........................
Previous Employer: .............................................................................................................................................................
Previous Employer's Address:

............................................................

Present net salary or commission: $

per

Years there:

........................................................................................

. No. Dependents:

Ages:

Alimony, child support, separate maintenance received under: court order □ written agreement □ oral understanding □
Other income: $

per

Source(s) of other income:

Is any inconie listed in this Section likely to be reduced in the next two years or before the credit requested is paid off?
□ Yes (Explain in detail on a separate sheet.) No □
Have you ever received credit from us? ....................... When? ...............
Checking Account No.: .................................. ............................

Office:

Institution and Branch:

SECTION B— INFORMATION REGARDING SPOUSE, JOINT APPLICANT, USER, OR OTHER PARTY (Use separate sheets if
necessary.)

City

Position or title: ...................................................

Name of supervisor:

Present net salary or commission: $
. No. Dependents:
per
Ages:
Alimony, child support, or separate maintenance income need not be revealed if yon do not wish to have it considered as a basis
for repaying this obligation.
Alimony, child support, separate maintenance received under: court order □ written agreement □ oral understanding □
Other income: $ ........................... per ..... ......................... Source(s) of other income:
Is any income listed in this Section likely to be reduced in the next two years or before the credit requested is paid off?
□ Yes (Explain in detail on a separate sheet.) □ No
Checking Account No.: .......................................................................... Institution and Branch: ..............................................................
Savings Account No.: .............. ............................................................... Institution and Branch: .................................................................
Name of nearest relative not living with
Spouse, Joint Applicant. User, or other Party: .......................................................................................... Telephone: .............................
Relationship: ____________________________________ __________ Address: ............... .......................................... .............................




23

Appendix B

Regulation B

SECTION C—MARITAL STATUS
Applicant: □ Married
□ Separated
Other Party: □ Married
□ Separated

□ Unmarried (including single, divorced, and widowed)
□ Unmarried (including single, divorced, widowed)

SECTION D—ASSET AND DEbT INFORMATION (If Section B has been completed, this Section should be completed giving
information about both the Applicant and Spouse. Joint Applicant. User, or Other Person. Please mark Applicantrelated information with an “A.” If Section B was not completed, only give information about the Applicant in this
Section.)
ASSETS OWNED (Use separate sheet if necessary.)
Description of Assets

Value
%

Cash

Subject to Debt?
Yes/No

Name(s) of Owner(s)

Automobile* (Make. Model, Year)
(bash Value of Life Insurance (Issuer,
Face Value)
Real Estate (Location, Date Acquired)
Marketable Securities (Issuer, Type, Wo. of Shares)
Other (Liat)

Total Assets

i

OUTSTANDING DEBTS (Include charge accounts, instalment contracts, credit cards, rent, mortgages, etc. Use separate sheet if
necessary.)
Name of Creditor
1. (Landlord or
Mortgage Holder)

Name in Which
Acct. Carried

Present
Original
Debt
Balance
$ (Omit rent) %(Omit rent)

*

t

Type of Debt
or Acct. No.
Q Rent Payment
□ Mortgage

Monthly
Payments

Past Due?
Yes/No

i

i
I
Total Debts

i

(Credit References)_________________________________________________________________________________

1.

_______ Date Paid

$

T
Are you a co-maker, endorser, or
guarantor on any loan or contract?
Are there any unsatisfied
judgments against you?

Yes □
Yes □
No n

No □
Amount $

If “yes.”
for whom?

To whom?
If “yes,”
to whom owed?

If "yes."
Have you been declared
Yes □
Year
bankrupt in the last 14 years
_ N ° _ D ____ where?
Other obligations—(E.g., Liability to pay alimony, child support, separate maintenance. Use separate sheet if necessary.)

SECTION E—SECURED CREDIT (Complete only if credit is to be secured.) Briefly describe the property to be given as security:

and list names and addresses of all co-owners of the property:
Address

Everything that I have stated in this application is correct to the best of my knowledge. I understand that you will retain
this application whether or not it is approved. You are authorized to check my credit and employment history and to answer ques­
tions about your credit experience with me.

Applicant’s Signature

24




Other Signature
(Where Applicable)

Date

Regulation B

Appendix B

[Residential real estate mortgage loan]
RESIDENTIAL LOAN APPLICATION
MORTGAGE I
APPLIED
FOR

□ Conventional □ FHA
□ VA

i. of I Monthly Payment I Escrow/Impounds (to be collected monthly)
nths
Principal A Interest
____ 1 $ _____
- I D Taxes □ Hazard Ins □ Mtg Ins □ __

Amount

□ -------------

Property Street Address
Year Built

Legal Description (Attach description if necessary.)

□ Construction
□ Refinance
□ Other (Explain)
□ Purchase
□ Const met lonPerm nent
Original Cost
Present Value (a)
Cost of Improv (bl“ T
Total (a + b)
ENTER TOTAL AS
Lot Value Data
Complete this line if
PURCHASE PRICE
1
Construction-Permanent
IN DETAII.S OF
Year Acquired
S
S
! *----------------------- ! %
PURCHASE.
1 Describe Improvements | ) made ( J to be made
Purpose of Refinance
Complete this line if a Refin nee Loan
Year Acquired 1 Original Cost | Amt. Existing Liens
Purpose of Loan:

! $
1*
Title Will Be Held In What Named)

Coat: 1 ---------------------

___________ l____________________
Manner in Which Title Wii Be Held

Source of Down Payment and Settlement Charles
destined to be completed by the borrower(s) with the lender's assistance. The Co-Borrower Section and all other Co-Borrower questions must be com
• ' checked if C another person will be jointly obti|aled with the Borrower on the loan. □ the Borrower is relymf on income from all
D
and the appropri
_
:------- -- IIMtl 0f another person as a basis for repayment of the loan, or □ the Borrower is married and resides.
child support. or se
property is located.

3. CO-BORROWER

2. BORROWER

□ Own

Present Address

□ Rent

Former address if less than 2 ;

Former address if less than 2

City State Zip -------------

City State. Zip .
Years at formei

Years at former address

□ M

□ Separated

□ Married

Dependents other than listed by

Yean employed in this line
of work or profession?

Name and Address of Employer

□ Separated

Dependents other l

Unmarried
Tncl. single, divorced, widowed)

□ Unmarried
Tnd. single, divorced, widowed)

employed in this line

Name and Address of Employer

Years on this job_
Position/Title

□ Self Employed

□ Self Employed
Type of Business

4. GROSS MONTHLY INCOME
Base Empl. Income

Position/Titlc

5. MONTHLY HOUSING EXPENSE

«. DETAILS OF PURCHASE

First Mortgage (PAI)
b Total Closing Costs (End.)

Other Financing (FBI)

Pre Paid Escrows (Ext )
d. Total (a-*-b+c)
Dividends Interest

Mortgage Insurance

Amount of Mortgt

Net Rental Income

Homeowner Assn. Dues

Other Financing
Present Equity in Lot
Amount of Cash Deposit
Closing Costs Paid by Seller
Cash Reqd. For Closing (Est.

7. DESCRIBE OTHER INCOME
Monthly Amount

8. IF EMPLOYED IN CURRENT POSITION FOR LESS THAN TWO YEARS COMPLETE THE FOLLOWING
Previous Employer School

Type of Business

Position/Ti

Dates From/To

Monthly Income

9. THESE QUESTIONS APPLY TO BOTH BORROWERS
Borrower Yes/No Co-Borrower Ye

Borrower Yes/No Co-Borrower Yes/No

Have you any outstanding judgments?
lave you been bankru
j had property foreclosed upon o
n lieu thereoP

Do you have n

r medical coverage?
ccupy the property?

I this property be y

• All Present Monthly Housing Expenses of the Borrower and Co-Borrower should be




combined basis.

25

Regulation B

Appendix B

This statement and any applicable supporting schedules may be completed jointly by both married and unmarried
t; otherwise aepnand liabilities arc suOcienily joined so that the statement can be meaningfully and faiity presented on a comb
t and supporting
rate statements and schedules arc required. If the Co-Sorrower section was completed about a spouse. H
us
□ Completed Jointly
□ Not Completed Jointly

I t. LIABILITIES
i refinancing of property.
Indicate by (•) those liabilities that win be satisfied upon sale of real estate owned or t
Acct. Name if Not
Mo. Pint, and
Creditor's
Description
Cash ^ M a rk et
Borrowers)
Mos. left to pay
Name. Address. Account Number
Cash Deposit Toward Purchase
Held By

Instalment Debts (include "revolv­
ing" charge accounts)

$

S

Unpaid

Pmt./Mos. S
/

Checking and Savings Accounts
(Names of lnstitiitioos/
Acct. Not.)

/
/
/

Stocks and Bonds (No /description)

/

/

Life Insurance Net Cash Value

X

Real Estate Loam
SUBTOTAL LIQUID ASSETS

S

Real Estate Owned (Enter Market
Value from St+edmle of Heal
Estate Owned)
Other Debt. Including Stock Pledges

Vested Interest in Retirement Fund
Net Worth of Busacas Owned
(Attach Financial Sint.)
Automobiles (Make and Year)

/
Alimony. Child Support, and Maintenance
Payments (Owed To)

Furniture and Personal Property
Other Amcts (Itenure)

TOTAL MONTHLY PAYMENTS
A
$

TOTAL ASSETS

S
TOTAL
LIABILITIES

NET WORTH (A minus B) S

S

SCHEDULE OF REAL ESTATE OWNED (II AddMo—I F rep w to O w ed Alt»cS S ty ra le ScWdMe)
Address of Property
(Indicate S if Sold. PS if Pending Sate
or R if Rental being held for income)

0

Amount of
Type of
Present
Mortgages
Properly Market Value

Rental

s

TOTALS

Taxes. Ins.
Maintenance
and Misc

Mortgage

*

S

S

S

S

s

s

*

Net
Renta)
*

S

S

12. LIST PREVIOUS CREDIT REFERENCES

0 «

Highest Balance

C-Oo-Borrower j Cre
r Creditor's Name and Address Account Numbei

Dale Paid

i credit haa previously been i
AGREEMENT: The Undersigned applies for the loan indicated in this application, to be secured
the property described herein, and represents that the property will not be used for any illegal or
made in this application are true and arc made for the purpose of obtaining the loan. Verification
in this application. The original or a copy of this application wig be retained by the tender, even

.s1
■a

by a first mortgage or deed of
restricted purpose and that all statements
may be obtained from any source named
if the I

INFORMATION FOR GOVERNMENT MONITORING PURPOSES
The following information is requested by the federal governm for certaea types of loam
ent
credit opportunity and fair housing tews. You are not requiredto fumth lias information, but ai
oa the basis of this information, nor on whether you chooee to furnish it. However, if you c
required to note race or national origin and sex on the basu
BORROWER:
I do not w to funus
ish
RACE OR C Am
erican Indma. Alaskan Native □ /
NATIONAL □ Black
□ Hupamc
£ W
hite

o do so. The lawprovides tk

RACE OR
NATIONAL
ORIGIN

FOR LENDER'S USE ONLY

26




. Asian. Pacific Islander

Regulation B
APPENDIX C—Sample Notification
Forms
This appendix contains eight sample notifica­
tion forms. Form s C -l through C -4 are in­
tended for use in notifying an applicant that
adverse action has been taken on an applica­
tion or account under section 2 0 2 .9 (a ) ( 1 )
and ( 2 ) ( i ) o f this regulation. Form C-5 is a
notice o f disclosure o f the right to request spe­
cific reasons for adverse action under section
2 0 2 .9 (a ) ( 1 ) and ( 2 ) ( i i ) . Form C -6 is de­
signed for use in notifying an applicant, under
section 2 0 2 .9 ( c ) ( 2 ) , that an application is
incomplete. Form s C -l and C -8 are intended
for use in connection with applications for
business credit under section 2 0 2 .9 (a ) ( 3 ) .
Form C -l contains the F air Credit R eport­
ing A ct disclosure as required by sections
6 1 5 (a ) and (b ) o f that act. Form s C-2
through C-5 contain only the section 6 1 5 (a )
disclosure (th at a creditor obtained inform a­
tion from a consum er reporting agency that
played a part in the credit decision). A credi­
tor must provide the section 6 1 5 (b ) disclo­
sure (th at a creditor obtained inform ation
from an outside source other than a consumer
reporting agency that played a part in the
credit decision) where appropriate.
The sample form s are illustrative and may
not be appropriate for all creditors. They were
designed to include some o f the factors that
creditors most com monly consider. I f a credi­
tor chooses to use the checklist o f reasons pro­
vided in one o f the sample forms in this ap­
pendix and if reasons com monly used by the
creditor are not provided on the form, the
creditor should modify the checklist by substi­
tuting or adding other reasons. F o r example,
if “inadequate downpayment” or “no deposit
relationship with us” are com mon reasons for
taking adverse action on an application, the
creditor ought to add or substitute such rea­

Appendix C
erences altogether; their statem ent o f reasons
should disclose “insufficient bank references,”
not “insufficient credit references.” Sim ilarly,
a creditor that considers bank references and
other credit references as distinct factors
should treat the two factors separately and
disclose them as appropriate. T he creditor
should either add such other factors to the
form or check “other” and include the appro­
priate explanation. T he creditor need not,
however, describe how or why a factor ad­
versely affected the application. F o r example,
the notice may say “length o f residence” rath­
er than “too short a period o f residence.”
A creditor may design its own notification
form s or use all or a portion o f the forms con­
tained in this appendix. Proper use o f Form s
C -l through C -4 will satisfy the requirement
o f section 2 0 2 .9 (a ) ( 2 ) ( i ) . Proper use o f
Form s C-5 and C -6 constitutes full com pli­
ance with sections 2 0 2 .9 (a ) (2 ) (ii) and
2 0 2 .9 ( c ) ( 2 ) , respectively. Proper use o f
Form s C -7 and C-8 will satisfy the require­
ments o f section 2 0 2 .9 (a ) ( 2 ) ( i) and (ii) , re­
spectively, for applications for business credit.

Form C -l—Sample Notice of Action
Taken and Statement of Reasons
Statem ent o f Credit Denial, Term ination,
or Change
D ate
A pplicant’s Name: __________________________
A pplicant’s Address: ________________________
Description o f A ccount, Transaction, or R e ­
quested Credit:
D escription o f A ction Taken:

sons for those presently contained on the sam­
ple forms.
I f the reasons listed on the forms are not
the factors actually used, a creditor will not
satisfy the notice requirement by simply
checking the closest identifiable factor listed.
F o r example, some creditors consider only
references from banks or other depository in­
stitutions and disregard finance company ref­




Part / — P R IN C IP A L R E A S O N (S ) F O R
C R E D IT D E N IA L , T E R M IN A T IO N , O R
O T H E R A C T IO N T A K E N C O N C E R N ­
IN G C R E D IT . This section must be com plet­
ed in all instances.
___Credit application incom plete

27

Appendix C
_ Insufficient number of credit references
_
provided
_ Unacceptable type of credit references
_
provided
_ Unable to verify credit references
_
_ Temporary or irregular employment
_
_ Unable to verify employment
_
_ Length of employment
_
_ Income insufficient for amount of credit
_
requested
_ Excessive obligations in relation to
_
income
_ Unable to verify income
_
_ Length of residence
_
_ Temporary residence
_
_ Unable to verify residence
_
_ No credit file
_
_ Limited credit experience
_
_ Poor credit performance with us
_
_ Delinquent past or present credit obliga­
_
tions with others
_ Garnishment, attachment, foreclosure, re­
_
possession, collection action, or judgment
_ Bankruptcy
_
_ Value or type of collateral not sufficient
_
_ Other, specify: -----------------------------------_

Part / / — D IS C L O S U R E O F U S E O F IN ­
F O R M A T IO N O B T A IN E D F R O M A N
O U T S ID E S O U R C E . This section should be
completed if the credit decision was based in
whole or in part on information that has been
obtained from an outside source.
___O ur credit decision was based in whole or
in part on information obtained in a re­
port from the consumer reporting agency
listed below. Y ou have a right under the
F a ir Credit Reporting A ct to know the
inform ation contained in your credit file
at the consumer reporting agency. T h e re­
porting agency played no part in our deci­
sion and is unable to supply specific rea­
sons why we have denied credit to you.
Name: _________________________________
Address: _______________________________
Telephone number:

28




Regulation B
___O ur credit decision was based in whole or
in part on inform ation obtained from an
outside source other than a consum er re­
porting agency. U nder the F a ir Credit R e ­
porting A ct, you have the right to make a
written request, no later than 60 days af­
ter you receive this notice, for disclosure
o f the nature o f this information.
I f you have any questions regarding this notice,
you should contact:
C reditor’s n a m e :____________________________
C reditor’s address: __________________________
C reditor’s telephone number: ______________
N O T IC E : T h e federal Equal Credit Opportu­
nity A ct prohibits creditors from discrim inat­
ing against credit applicants on the basis o f
race, color, religion, national origin, sex, m ari­
tal status, age (provided the applicant has the
capacity to enter into a binding c o n tra ct); be­
cause all or part o f the applicant’s incom e de­
rives from any public assistance program; or
because the applicant has in good faith exer­
cised any right under the Consumer Credit
Protection A ct. T he federal agency that ad­
ministers com pliance with this law concerning
this creditor is (nam e and address as specified
by the appropriate agency listed in appendix
A ).

Form C-2—Sample Notice of Action
Taken and Statement of Reasons
D ate
D ear Applicant:
Thank you for your recent application.
Y o u r request for [a lo a n /a credit card /an in­
crease in your credit lim it] was carefully con­
sidered, and we regret that we are unable to
approve your application at this time, for the
following reason ( s ):
Y o u r Incom e:
___is below our minimum requirement.
___is insufficient to sustain payments on
the amount o f credit requested.
___could not be verified.

Appendix C

Regulation B
Y o u r Em ploym ent:
___is not o f sufficient length to qualify.
___could not be verified.
Y o u r Credit History:
___o f making payments on time was not
satisfactory.
___could not be verified.

Y o u r Application:
___lacks a sufficient number o f credit
references.
___lacks acceptable types o f credit
references.
___reveals that current obligations are ex­
cessive in relation to income.

O ther: ___________________________________
T he consum er reporting agency contacted
that provided information that influenced our
decision in whole o r in part was [nam e, ad­
dress and telephone number o f the reporting
agency]. The reporting agency is unable to
supply specific reasons why we have denied
credit to you. Y ou do, however, have a right
under the F a ir Credit Reporting A ct to know
the inform ation contained in your credit file.
A ny questions regarding such information
should be directed to [consum er reporting
agency].
I f you have any questions regarding this let­
ter you should contact us at [creditor’s name,
address and telephone nu m ber].
N O T IC E : T he federal Equal Credit Opportu­
nity A ct prohibits creditors from discrim inat­
ing against credit applicants on the basis o f
race, color, religion, national origin, sex, m ari­
tal status, age (provided the applicant has the
capacity to enter into a binding co n tract); be­
cause all or part o f the applicant’s incom e de­
rives from any public assistance program; or
because the applicant has in good faith exer­
cised any right under the Consumer Credit
Protection A ct. T h e federal agency that ad­
ministers com pliance with this law concerning
this creditor is (nam e and address as specified
by the appropriate agency listed in appendix
A ).




Form C-3—Sample Notice of Action
Taken and Statement of Reasons (Credit
Scoring)
D ate
D ear Applicant:
Thank you for your recent application
f o r ________________________ W e regret that
we are unable to approve your request.
Y o u r application was processed by a credit
scoring system that assigns a numerical value
to the various items o f inform ation we consid­
er in evaluating an application. These numeri­
cal values are based upon the results o f analy­
ses o f repayment histories o f large numbers o f
custom ers.
T h e inform ation you provided in your ap­
plication did not score a sufficient number o f
points for approval o f the application. The
reasons you did not score well compared with
other applicants were:
• Insufficient bank references
• Type o f occupation
• Insufficient credit experience
In evaluating your application the consum­
er reporting agency listed below provided us
with inform ation that in whole or in part in­
fluenced our decision. T he reporting agency
played no part in our decision other than pro­
viding us with credit inform ation about you.
U nder the F air Credit Reporting A ct, you
have a right to know the inform ation provided
to us. It can be obtained by contacting:
[nam e, address, and telephone number o f the
consum er reporting agency].
I f you have any questions regarding this let­
ter, you should contact us at
Creditor’s Name: ________________________
Address: _________________________________
Telephone: _______________________________
Sincerely,

N O T IC E : T h e federal Equal Credit Opportu­
nity A ct prohibits creditors from discrim inat­
ing against credit applicants on the basis o f
race, color, religion, national origin, sex, m ari­
tal status, age (with certain limited excep­
tion s); because all or part o f the applicant’s

29

Appendix C

Regulation B

income derives from any public assistance
program; or because the applicant has in good
faith exercised any right under the Consumer
Credit Protection Act. The federal agency
that administers compliance with this law
concerning this creditor is (name and address
as specified by the appropriate agency listed in
appendix A).

Form C-4—Sample Notice of Action
Taken, Statement of Reasons, and
Counteroffer
Date
Dear Applicant:
Thank you for your application for
_____________________ We are unable to of­
fer you credit on the terms that you requested
for the following reason(s):
We can, however, offer you credit on the
following terms: _________________________
If this offer is acceptable to you, please noti­
fy us within [amount of time] at the following
address:________________________________
Our credit decision on your application was
based in whole or in part on information ob­
tained in a report from [name, address and
telephone number of the consumer reporting
agency]. You have a right under the Fair
Credit Reporting Act to know the informa­
tion contained in your credit file at the con­
sumer reporting agency.
You should know that the federal Equal
Credit Opportunity Act prohibits creditors,
such as ourselves, from discriminating against
credit applicants on the basis of their race,
color, religion, national origin, sex, marital
status, age because they receive income from a
public assistance program, or because they
may have exercised their rights under the
Consumer Credit Protection Act. If you be­
lieve there has been discrimination in han­
dling your application you should contact the
[name and address of the appropriate federal
enforcement agency listed in appendix A ].
Sincerely,
30




Form C-5—Sample Disclosure of Right
to Request Specific Reasons for Credit
Denial
Date
Dear Applicant:
Thank you for applying to us for_________
After carefully reviewing your application,
we are sorry to advise you that we cannot
[open an account for you/grant a loan to
you/increase your credit limit] at this time.
If you would like a statement of specific
reasons why your application was denied,
please contact [our credit service manager]
shown below within 60 days of the date of this
letter. We will provide you with the statement
of reasons within 30 days after receiving your
request.
Creditor’s Name
Address
Telephone number
If we obtained information from a consumer
reporting agency as part of our consideration
of your application, its name, address, and tel­
ephone number is shown below. You can find
out about the information contained in your
file (if one was used) by contacting:
Consumer reporting agency’s name
Address
Telephone number
Sincerely,

NOTICE: The federal Equal Credit Opportu­
nity Act prohibits creditors from discriminat­
ing against credit applicants on the basis of
race, color, religion, national origin, sex, mari­
tal status, age (provided the applicant has the
capacity to enter into a binding contract); be­
cause all or part of the applicant’s income de­
rives from any public assistance program; or
because the applicant has in good faith exer­
cised any right under the Consumer Credit
Protection Act. The federal agency that ad­
ministers compliance with this law concerning
this creditor is (name and address as specified
by the appropriate agency listed in appendix
A).

Regulation B

Appendix C

FORM C-6—Sample Notice of
Incomplete Application and Request for
Additional Information
Creditor’s name
Address
Telephone number
Date
Dear Applicant:
Thank you for your application for credit.
The following information is needed to make
a decision on your application: ____________
We need to receive this information by
(date) . If we do not receive it by that
date, we will regrettably be unable to give fur­
ther consideration to your credit request.
Sincerely,

FORM C-7—Sample Notice of Action
Taken and Statement of Reasons
(Business Credit)
Creditor’s Name
Creditor’s address
Date
Dear Applicant:
Thank you for applying to us for credit. We
have given your request careful consideration,
and regret that we are unable to extend credit
to you at this time for the following reasons:
[Insert appropriate reason, such as
Value or type of collateral not sufficient
Lack of established earnings record
Slow or past due in trade or loan payments]
Sincerely,
NOTICE: The federal Equal Credit Opportu­
nity Act prohibits creditors from discriminat­
ing against credit applicants on the basis of
race, color, religion, national origin, sex, mari­
tal status, age (provided the applicant has the
capacity to enter into a binding contract); be­
cause all or part of the applicant’s income de­
rives from any public assistance program; or
because the applicant has in good faith exer­
cised any right under the Consumer Credit
Protection Act. The federal agency that ad­
ministers compliance with this law concerning




this creditor is [name and address as specified
by the appropriate agency listed in appendix
A],

FORM C-8—Sample Disclosure of Right
to Request Specific Reasons for Credit
Denial Given at Time of Application
(Business Credit)
Creditor’s name
Creditor’s address
If your application for business credit is de­
nied, you have the right to a written statement
of the specific reasons for the denial. To ob­
tain the statement, please contact [name, ad­
dress and telephone number of the person or
office from which the statement of reasons can
be obtained] within 60 days from the date you
are notified of our decision. We will send you
a written statement of reasons for the denial
within 30 days of receiving your request for
the statement.
NOTICE: The federal Equal Credit Opportu­
nity Act prohibits creditors from discriminat­
ing against credit applicants on the basis of
race, color, religion, national origin, sex, mari­
tal status, age (provided the applicant has the
capacity to enter into a binding contract); be­
cause all or part of the applicant’s income de­
rives from any public assistance program; or
because the applicant has in good faith exer­
cised any right under the Consumer Credit
Protection Act. The federal agency that ad­
ministers compliance with this law concerning
this creditor is [name and address as specified
by the appropriate agency listed in appendix
A],

APPENDIX D—Issuance of Staff
Interpretations

Official Staff Interpretations

Officials in the Board’s Division of Consumer
and Community Affairs are authorized to is­
sue official staff interpretations of this regula­
tion. These interpretations provide the protec­
tion afforded under section 706(e) of the act.
Except in unusual circumstances, such inter­
pretations will not be issued separately but
31

Appendix D

Regulation B

will be incorporated in an official commentary
to the regulation, which will be amended
periodically.

The request should contain a complete state­
ment of all relevant facts concerning the issue,
including copies of all pertinent documents.

Requests for Issuance of Official Staff
Interpretations

Scope of Interpretations

A request for an official staff interpretation
should be in writing and addressed to the Di­
rector, Division of Consumer and Community
Affairs, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551.

No staff interpretations will be issued approv­
ing creditors’ forms or statements. This re­
striction does not apply to forms or state­
ments whose use is required or sanctioned by
a government agency.

32



Equal Credit Opportunity Act
15 USC 1691; as added by Pub. L. 93-495, Title V, 88 Stat. 1521 (October 28, 1974)

PUBLIC LAW 93-495, TITLE V
Section
502 Findings and purpose
503 Amendment to the Consumer Credit
Protection Act

SECTION 502—Findings and Purpose
The Congress finds that there is a need to in­
sure that the various financial institutions and
other firms engaged in the extensions of credit
exercise their responsibility to make credit
available with fairness, impartiality, and with­
out discrimination on the basis of sex or mari­
tal status. Economic stabilization would be
enhanced and competition among the various
financial institutions and other firms engaged
in the extension of credit would be strength­
ened by an absence of discrimination on the
basis of sex or marital status, as well as by the
informed use of credit which Congress has
heretofore sought to promote. It is the pur­
pose of this Act to require that financial
institutions and other firms engaged in the ex­
tension of credit make that credit equally
available to all creditworthy customers with­
out regard to sex or marital status.

[15 USC 1691 note.]

SECTION 503—Amendment to the
Consumer Credit Protection Act
The Consumer Credit Protection Act (Public
Law 90-321) is amended by adding at the end
thereof a new title VII:

TITLE VII—EQUAL CREDIT
OPPORTUNITY
Section
701 Prohibited discrimination; reasons for
adverse action
702 Definitions
703 Regulations
704 Administrative enforcement




705
706
707
708
709

Relation to State laws
Civil liability
Annual reports to Congress
Effective date
Short title

SECTION 701—Prohibited
Discrimination; Reasons for Adverse
Action*
(a) It shall be unlawful for any creditor to
discriminate against any applicant, with re­
spect to any aspect of a credit transaction—
(1) on the basis of race, color, religion, na­
tional origin, sex or marital status, or age
(provided the applicant has the capacity to
contract);
(2) because all or part of the applicant’s
income derives from any public assistance
program; or
(3) because the applicant has in good faith
exercised any right under the Consumer
Credit Protection Act.
(b) It shall not constitute discrimination for
purposes of this title for a creditor—
(1) to make an inquiry of marital status if
such inquiry is for the purpose of ascertain­
ing the creditor’s rights and remedies appli­
cable to the particular extension of credit
and not to discriminate in a determination
of creditworthiness;
(2) to make an inquiry of the applicant’s
age or of whether the applicant’s income
derives from any public assistance program
if such inquiry is for the purpose of deter­
mining the amount and probable continu­
ance of income levels, credit history, or oth­
er pertinent element of creditworthiness as
provided in regulations of the Board;
(3) to use any empirically derived credit
system which considers age if such system
is demonstrably and statistically sound in
accordance with regulations of the Board,
except that in the operation of such system

* Effective date for amendments to section 701 is March
23, 1977. All other amendments are effective upon
enactment.

33

§701
the age of an elderly applicant may not be
assigned a negative factor or value; or
(4) to make an inquiry or to consider the
age of an elderly applicant when the age of
such applicant is to be used by the creditor
in the extension of credit in favor of such
applicant.
(c) It is not a violation of this section for a
creditor to refuse to extend credit offered pur­
suant to—
(1) any credit assistance program express­
ly authorized by law for an economically
disadvantaged class of persons;
(2) any credit assistance program adminis­
tered by a nonprofit organization for its
members or an economically disadvantaged
class of persons; or
(3) any special purpose credit program of­
fered by a profitmaking organization to
meet special social needs which meets stan­
dards prescribed in regulations by the
Board;
if such refusal is required by or made pursu­
ant to such program.
(d ) (1) Within thirty days (or such longer
reasonable time as specified in regulations
of the Board for any class of credit transac­
tion) after receipt of a completed applica­
tion for credit, a creditor shall notify the
applicant of its action on the application.
(2) Each applicant against whom adverse
action is taken shall be entitled to a state­
ment of reasons for such action from the
creditor. A creditor satisfies this obligation
by—
(A ) providing statements of reasons in
writing as a matter of course to appli­
cants against whom adverse action is tak­
en; or
(B ) giving written notification of ad­
verse action which discloses (i) the appli­
cant’s right to a statement of reasons
within thirty days after receipt by the
creditor of a request made within sixty
days after such notification, and (ii) the
identity of the person or office from
which such statement may be obtained.
Such statement may be given orally if the
written notification advises the applicant
of his right to have the statement of rea­
34




Equal Credit Opportunity Act
sons confirmed in writing on written
request.
(3) A statement of reasons meets the re­
quirements of this section only if it contains
the specific reasons for the adverse action
taken.
(4) Where a creditor has been requested
by a third party to make a specific extension
of credit directly or indirectly to an appli­
cant, the notification and statement of rea­
sons required by this subsection may be
made directly by such creditor, or indirect­
ly through the third party, provided in ei­
ther case that the identity of the creditor is
disclosed.
(5) The requirements of paragraph (2),
(3 ), or (4) may be satisfied by verbal state­
ments or notifications in the case of any
creditor who did not act on more than 150
applications during the calendar year pre­
ceding the calendar year in which the ad­
verse action is taken, as determined under
regulations of the Board.
(6) For purposes of this subsection, the
term “adverse action” means a denial or
revocation of credit, a change in the terms
of an existing credit arrangement, or a re­
fusal to grant credit in substantially the
amount or on substantially the terms re­
quested. Such term does not include a re­
fusal to extend additional credit under an
existing credit arrangement where the ap­
plicant is delinquent or otherwise in default,
or where such additional credit would ex­
ceed a previously established credit limit.
[15 USC 1691. As amended by act o f March 23, 1976 (9 0
Stat. 2 5 1 ).]

SECTION 702— Definitions
(a) The definitions and rules of construction
set forth in this section are applicable for the
purposes of this title.
(b) The term “applicant” means any person
who applies to a creditor directly for an
extension, renewal, or continuation of credit,
or applies to a creditor indirectly by use of an
existing credit plan for an amount exceeding a
previously established credit limit.

Equal Credit Opportunity Act
(c) The term “Board” refers to the Board of
Governors of the Federal Reserve System.
(d) The term “credit” means the right grant­
ed by a creditor to a debtor to defer payment
of debt or to incur debt and defer its payment
or to purchase property or services and defer
payment therefor.
(e) The term “creditor” means any person
who regularly extends, renews, or continues
credit; any person who regularly arranges for
the extension, renewal, or continuation of
credit; or any assignee of an original creditor
who participates in the decision to extend, re­
new, or continue credit.
(f) The term “person” means a natural per­
son, a corporation, government or govern­
mental subdivision or agency, trust, estate,
partnership, cooperative, or association.
(g) Any reference to any requirement im­
posed under this title or any provision thereof
includes reference to the regulations of the
Board under this title or the provision thereof
in question.
[15 u se

1691a.]

SE C T IO N 703— Regulations
(a )(1 ) The Board shall prescribe regulations
to carry out the purposes of this title. These
regulations may contain but are not limited
to such classifications, differentiation, or
other provision, and may provide for such
adjustments and exceptions for any class of
transactions, as in the judgment of the
Board are necessary or proper to effectuate
the purposes of this title, to prevent circum­
vention or evasion thereof, or to facilitate or
substantiate compliance therewith.
(2) Such regulations may exempt from the
provisions of this title any class of transac­
tions that are not primarily for personal,
family, or household purposes, or business
or commercial loans made available by a
financial institution, except that a particular
type within a class of such transactions may
be exempted if the Board determines, after
making an express finding that the applica­




§703
tion of this title or of any provision of this
title of such transaction would not contrib­
ute substantially to effecting the purposes of
this title.
(3) An exemption granted pursuant to
paragraph (2) shall be for no longer than
five years and shall be extended only if the
Board makes a subsequent determination,
in the manner described by such paragraph,
that such exemption remains appropriate.
(4) Pursuant to Board regulations, entities
making business or commercial loans shall
maintain such records or other data relat­
ing to such loans as may be necessary to
evidence compliance with this subsection or
enforce any action pursuant to the authori­
ty of this Act. In no event shall such rec­
ords or data be maintained for a period of
less than one year. The Board shall promul­
gate regulations to implement this para­
graph in the manner prescribed by chapter
5 of title 5, United States Code.
(5) The Board shall provide in regulations
that an applicant for a business or commer­
cial loan shall be provided a written notice
of such applicant’s right to receive a written
statement of the reasons for the denial of
such loan.
(b) The Board shall establish a Consumer
Advisory Council to advise and consult with
it in the exercise of its functions under the
Consumer Credit Protection Act and to ad­
vise and consult with it concerning other con­
sumer related matters it may place before the
Council. In appointing the members of the
Council, the Board shall seek to achieve a fair
representation of the interests of creditors and
consumers. The Council shall meet from time
to time at the call of the Board. Members of
the Council who are not regular full-time em­
ployees of the United States shall, while at­
tending meetings of such Council, be entitled
to receive compensation at a rate fixed by the
Board, but not exceeding $100 per day, in­
cluding travel time. Such members may be al­
lowed travel expenses, including transporta­
tion and subsistence, while away from their
homes or regular place of business.
[15 U SC 1691b. As amended by acts o f M arch 23, 1976
(9 0 Stat. 25 2 ) and Oct. 25, 1988 (1 0 2 Stat. 2 6 9 2 ).]

35

§704
SE C T IO N 7 0 4 — Administrative
Enforcement
(a) Compliance with the requirements im­
posed under this title shall be enforced under:
(1) Section 8 of the Federal Deposit Insur­
ance Act, in the case of—
(A ) national banks, by the Comptroller
of the Currency;
(B ) member banks of the Federal Re­
serve System (other than national
banks), by the Board;
(C ) banks insured by the Federal Depo­
sit Insurance Corporation (other than
members of the Federal Reserve Sys­
tem), by the Board of Directors of the
Federal Deposit Insurance Corporation.
(2) Section 8 of the Federal Deposit Insur­
ance Act, by the Director of the Office of
Thrift Supervision, in the case of a savings
association the deposits of which are in­
sured by the Federal Deposit Insurance
Corporation.
(3) The Federal Credit Union Act, by the
Administrator of the National Credit Un­
ion Administration with respect to any
Federal Credit Union.
(4) The Acts to regulate commerce, by the
Interstate Commerce Commission with re­
spect to any common carrier subject to
those Acts.
(5) The Federal Aviation Act of 1958, by
the Secretary of Transportation with re­
spect to any air carrier or foreign air carrier
subject to that Act.
(6) The Packers and Stockyards Act, 1921
(except as provided in section 406 of that
A ct), by the Secretary of Agriculture with
respect to any activities subject to that Act.
(7) The Farm Credit Act of 1971, by the
Farm Credit Administration with respect to
any Federal land bank, Federal land bank
association, Federal intermediate credit
bank, and production credit association.
(8) The Securities Exchange Act of 1934,
by the Securities and Exchange Commis­
sion with respect to brokers and dealers;
and
(9) The Small Business Investment Act of
1958, by the Small Business Administra­
tion, with respect to small business invest­
ment companies.




Equal Credit Opportunity Act
(b) For the purpose of the exercise by any
agency referred to in subsection (a) of its
powers under any Act referred to in that sub­
section, a violation of any requirement im­
posed under this title shall be deemed to be a
violation of a requirement imposed under that
Act. In addition to its powers under any pro­
vision of law specifically referred to in subsec­
tion (a), each of the agencies referred to in
that subsection may exercise for the purpose
of enforcing compliance with any requirement
imposed under this title, any other authority
conferred on it by law. The exercise of the
authorities of any of the agencies referred to
in subsection (a) for the purpose of enforcing
compliance with any requirement imposed
under this title shall in no way preclude the
exercise of such authorities for the purpose of
enforcing compliance with any other provi­
sion of law not relating to the prohibition of
discrimination on the basis of sex or marital
status with respect to any aspect of a credit
transaction.
(c) Except to the extent that enforcement of
the requirements imposed under this title is
specifically committed to some other Govern­
ment agency under subsection (a), the Feder­
al Trade Commission shall enforce such re­
quirements. For the purpose of the exercise by
the Federal Trade Commission of its func­
tions and powers under the Federal Trade
Commission Act, a violation of any require­
ment imposed under this title shall be deemed
a violation of a requirement imposed under
that Act. All of the functions and powers of
the Federal Trade Commission under the
Federal Trade Commission Act are available
to the Commission to enforce compliance by
any person with the requirements imposed un­
der this title, irrespective of whether that per­
son is engaged in commerce or meets any oth­
er jurisdictional tests in the Federal Trade
Commission Act, including the power to en­
force any Federal Reserve Board regulation
promulgated under this title in the same man­
ner as if the violation had been a violation of a
Federal Trade Commission trade regulation
rule.
(d) The authority of the Board to issue regu­
lations under this title does not impair the au­
thority of any other agency designated in this

Equal Credit Opportunity Act
section to make rules respecting its own pro­
cedures in enforcing compliance with require­
ments imposed under this title.

[15 USC 1691c. As amended by acts of March 23, 1976
(90 Stat. 253); Oct. 3, 1984 (98 Stat. 1708); and Aug. 9,
1989 (103 Stat. 439).]
SECTION 705—Relation to State Laws
(a) A request for the signature of both par­
ties to a marriage for the purpose of creating a
valid lien, passing clear title, waiving inchoate
rights to property, or assigning earnings, shall
not constitute discrimination under this title.
That this provision shall
not be construed to permit a creditor to take
sex or marital status into account in connec­
tion with the evaluation of creditworthiness of
any applicant.

Provided, however,

is

(b) Consideration or application of State
property laws directly or indirectly affecting
creditworthiness shall not constitute discrimi­
nation for purposes of this title.
(c) Any provision of State law which prohib­
its the separate extension of consumer credit
to each party to a marriage shall not apply in
any case where each party to a marriage vol­
untarily applies for separate credit from the
same creditor:
That in any case
where such a State law is so preempted, each
party to the marriage shall be solely responsi­
ble for the debt so contracted.

§706
(f) This title does not annul, alter, or affect,
or exempt any person subject to the provisions
of this title from complying with, the laws of
any State with respect to credit discrimina­
tion, except to the extent that those laws are
inconsistent with any provision of this title,
and then only to the extent of the inconsist­
ency. The Board is authorized to determine
whether such inconsistencies exist. The Board
may not determine that any State law is in­
consistent with any provision of this title if the
Board determines that such law gives greater
protection to the applicant.
(g) The Board shall by regulation exempt
from the requirements of sections 701 and 702
of this title any class of credit transactions
within any State if it determines that under
the law of that State that class of transactions
is subject to requirements substantially similar
to those imposed under this title or that such
law gives greater protection to the applicant,
and that there is adequate provision for en­
forcement. Failure to comply with any re­
quirement of such State law in any transaction
so exempted shall constitute a violation of this
title for the purposes of section 706.

[15 USC 169 Id. As amended by act of March 23, 1976 (90
Stat. 253).]

Provided,

(d) When each party to a marriage separate­
ly and voluntarily applies for and obtains sep­
arate credit accounts with the same creditor,
those accounts shall not be aggregated or oth­
erwise combined for purposes of determining
permissible finance charges or permissible
loan ceilings under the laws of any State or of
the United States.
(e) Where the same act or omission consti­
tutes a violation of this title and of applicable
State law, a person aggrieved by such conduct
may bring a legal action to recover monetary
damages either under this title or under such
State law, but not both. This election of reme­
dies shall not apply to court actions in which
the relief sought does not include monetary
damages or to administrative actions.




SECTION 706—Civil Liability
(a) Any creditor who fails to comply with
any requirement imposed under this title shall
be liable to the aggrieved applicant for any
actual damages sustained by such applicant
acting either in an individual capacity or as a
member of a class.
(b) Any creditor, other than a government
or governmental subdivision or agency, who
fails to comply with any requirement imposed
under this title shall be liable to the aggrieved
applicant for punitive damages in an amount
not greater than $10,000, in addition to any
actual damages provided in subsection (a),
except that in the case of a class action the
total recovery under this subsection shall not
exceed the lesser of $500,000 or 1 per centum
of the net worth of the creditor. In determin­
ing the amount of such damages in any action,
the court shall consider, among other relevant

37

§706
factors, the amount of any actual damages
awarded, the frequency and persistence of fail­
ures of compliance by the creditor, the re­
sources of the creditor, the number of persons
adversely affected, and the extent to which the
creditor’s failure of compliance was
intentional.
(c) Upon application by an aggrieved appli­
cant, the appropriate United States district
court or any other court of competent juris­
diction may grant such equitable and declara­
tory relief as is necessary to enforce the re­
quirements imposed under this title.
(d) In the case of any successful action under
subsection (a), (b), or (c), the costs of the
action, together with a reasonable attorney’s
fee as determined by the court, shall be added
to any damages awarded by the court under
such subsection.
(e) No provision of this title imposing any
liability shall apply to any act done or omitted
in good faith in conformity with any official
rule, regulation, or interpretation thereof by
the Board or in conformity with any interpre­
tation or approval by an official or employee
of the Federal Reserve System duly autho­
rized by the Board to issue such interpreta­
tions or approvals under such procedures as
the Board may prescribe therefor, notwith­
standing that after such act or omission has
occurred, such rule, regulation, interpretation,
or approval is amended, rescinded, or deter­
mined by judicial or other authority to be in­
valid for any reason.
(f) Any action under this section may be
brought in the appropriate United States dis­
trict court without regard to the amount in
controversy, or in any other court of compe­
tent jurisdiction. No such action shall be
brought later than two years from the date of
the occurrence of the violation, except that—
(1) whenever any agency having responsi­
bility for administrative enforcement under
section 704 commences an enforcement
proceeding within two years from the date
of the occurrence of the violation,
(2) whenever the Attorney General com­
mences a civil action under this section
within two years from the date of occur­
rence of the violation,

38




Equal Credit Opportunity Act
then any applicant who has been a victim of
the discrimination which is the subject of such
proceeding or civil action may bring an action
under this section not later than one year after
the commencement of that proceeding or
action.
(g) The agencies having responsibility for ad­
ministrative enforcement under section 704, if
unable to obtain compliance with section 701,
are authorized to refer the matter to the At­
torney General with a recommendation that
an appropriate civil action be instituted.
(h) When a matter is referred to the Attor­
ney General pursuant to subsection (g), or
whenever he has reason to believe that one or
more creditors are engaged in a pattern or
practice in violation of this title, the Attorney
General may bring a civil action in any appro­
priate United States district court for such re­
lief as may be appropriate, including injunc­
tive relief.
(i) No person aggrieved by a violation of this
title and by a violation of section 805 of the
Civil Rights Act of 1968 shall recover under
this title and section 812 of the Civil Rights
Act of 1968, if such violation is based on the
same transaction.
(j) Nothing in this title shall be construed to
prohibit the discovery of a creditor’s credit
granting standards under appropriate discov­
ery procedures in the court or agency in
which an action or proceeding is brought.

[15 USC 1691e. As amended by act of March 23, 1976 (90
Stat. 253).]
SECTION 707— Annual Reports to
Congress
Each year, the Board and the Attorney Gen­
eral shall, respectively, make reports to the
Congress concerning the administration of
their functions under this title, including such
recommendations as the Board and the Attor­
ney General, respectively, deem necessary or
appropriate. In addition, each report of the
Board shall include its assessment of the ex­
tent to which compliance with the require­
ments of this title is being achieved, and a
summary of the enforcement actions taken by

Equal Credit Opportunity Act
each of the agencies assigned administrative
enforcement responsibilities under section
704.

[15 USC 1691f. As added by act of March 23, 1976 (90
Stat. 255) and amended by act of March 31, 1980 (94 Stat.
174).]

§709
shall apply to any violation occurring on or
after such date, except that the amendments
made to section 701 of the Equal Credit Op­
portunity Act shall take effect 12 months after
the date of enactment.

[15 USC 1691 note.]

SECTION 708—Effective Date
This title takes effect upon the expiration of
one year after the date of its enactment. The
amendments made by the Equal Credit Op­
portunity Act Amendments of 1976 shall take
effect on the date of enactment thereof and




SECTION 709— Short Title
This title may be cited as the “Equal Credit
Opportunity Act.”

[15 USC 1691 note.]

39

Board of Governors of the Federal Reserve System

Regulation C
Home Mortgage Disclosure
12 CFR 203; as amended effective January 1, 1990




Any inquiry relating to this regulation should be addressed to the Federal Reserve Bank of the
District in which the inquiry arises.
February 1990




Contents

>

Page
Section 203.1—Authority, purpose, and
scope ..........................................................
(a) Authority........................................
(b) Purpose.............................................
(c) Scope.................................................
(d) Loan aggregation and central data
depositories ....................................
Section 203.2—Definitions..........................
Section 203.3—Exempt institutions...........
(a) Exemption based on asset size or
location.............................................
(b) Exemption based on state law----(c) Loss of exemption..........................
Section 203.4— Compilation of loan data .
(a) Data format and itemization.........
(b) Collection of data on race or
national origin, sex, and income ..
(c) Optional d ata..................................

Page

2
2
2
3
3

(d) Excluded data .............................. . 3
Section 203.5— Disclosure and reporting . 3
(a) Reporting requirements ............. . 3
(b) Disclosure to the public............... . 3
(c) Availability of disclosure
statem ent....................................... . 3
(d) Notice of availability................... . 4
Section 203.6— Enforcement................... . 4
(a) Administrative enforcement . . . . . 4
(b) Bona fide errors............................ . 4
Appendix A— Forms and instructions for
loan/application register ..................... . 4
Appendix B— Form and instructions for
data collection on race or national
origin and sex ......................................... . 15

3
3

HOME MORTGAGE DISCLOSURE
A C T .............................................................. . 17

1
1
1
1
1
1
2

)

i




i

Regulation C
Home Mortgage Disclosure

12 CFR 203*; as revised effective January 1, 1990

Section
203.1 Authority, purpose, and scope
203.2 Definitions
203.3 Exempt institutions
203.4 Compilation of loan data
203.5 Disclosure and reporting
203.6 Enforcement
Appendix A— Form and instructions for
loan/application register
Appendix B— Form and instructions for data
collection on race or national origin and sex

SECTION 203.1—Authority, Purpose,
and Scope

Authority.

(a)
This regulation is issued by the
Board of Governors of the Federal Reserve
System ( “Board”) pursuant to the Home
Mortgage Disclosure Act (12 USC 2801 et
seq.), as amended. The information-collection
requirements have been approved by the U.S.
Office of Management and Budget under 44
USC 3501 et seq. and have been assigned
OMB No. 7100-0247.

associations, credit unions, and other mort­
gage lending institutions, as defined in section
203.2(e). It requires an institution to report
data to its supervisory agency about homepurchase and home-improvement loans it
originates or purchases, or for which it re­
ceives applications; and to disclose certain
data to the public.
(d) Loan aggregation and central data depos­
itories. Using the loan data made available by
financial institutions, the Federal Financial
Institutions Examination Council will prepare
disclosure statements and will produce vari­
ous reports for individual institutions for each
metropolitan statistical area (M SA), showing
lending patterns by location, age of housing
stock, income level, sex, and racial character­
istics. The disclosure statements and reports
will be available to the public at central data
depositories located in each MSA. A listing of
central data depositories can be obtained from
the Federal Financial Institutions Examina­
tion Council, Washington, D.C. 20006.

Purpose.

(b)
(1) This regulation implements
the Home Mortgage Disclosure Act, which
is intended to provide the public with loan
data that can be used—
(i) to help determine whether financial
institutions are serving the housing needs
of their communities;
(ii) to assist public officials in distribut­
ing public-sector investments so as to at­
tract private investment to areas where it
is needed; and
(iii) to assist in identifying possible dis­
criminatory lending patterns and enforc­
ing antidiscrimination statutes.
(2) Neither the act nor this regulation is
intended to encourage unsound lending
practices or the allocation of credit.

Scope.

(c)
This regulation applies to certain
financial institutions, including banks, saving

* Code of Federal Regulations, title 12, chapter II, part
203.




SECTION 203.2—Definitions
In this regulation—

Act

(a)
means the Home Mortgage Disclo­
sure Act (12 USC 2801 et seq.), as amended.

Application

(b)
means an oral or written re­
quest for a home-purchase or home-improve­
ment loan that is made in accordance with
procedures established by a financial institu­
tion for the type of credit requested.

Branch office

(c)
means—
(1) any office of a bank, savings associa­
tion, or credit union that is approved as a
branch by a federal or state supervisory
agency, but excludes free-standing electron­
ic terminals such as automated teller
machines;
(2) any office of a mortgage-lending insti­
tution (other than a bank, savings associa1

§ 203.2
tion, or credit union) that takes applica­
tions from the public for home-purchase or
home-improvement loans. A mortgage­
lending institution is also deemed to have a
branch office in an MSA if, in the preceding
calendar year, it received applications for,
originated, or purchased five or more homepurchase or home-improvement loans on
property located in that MSA.

Dwelling

(d)
means a residential structure
(whether or not it is attached to real proper­
ty) located in a state of the United States of
America, the District of Columbia, or the
Commonwealth of Puerto Rico. The term in­
cludes an individual condominium unit, coop­
erative unit, or mobile or manufactured home.

Financial institution

(e)
means—
(1) a bank, savings association, or credit
union that originated in the preceding cal­
endar year a home-purchase loan (other
than temporary financing such as a con­
struction loan) secured by a first lien on a
one- to four-family dwelling if—
(i) the institution is federally insured or
regulated; or
(ii) the loan is insured, guaranteed, or
supplemented by any federal agency; or
(iii) the institution intended to sell the
loan to the Federal National Mortgage
Association or the Federal Home Loan
Mortgage Corporation;
(2) a for-profit mortgage-lending institu­
tion (other than a bank, savings associa­
tion, or credit union) whose home-purchase
loan originations equaled or exceeded 10
percent of its loan volume, measured in dol­
lars, in the preceding calendar year.

Home-improvement loan

(f)
means any loan
that—
(1) is stated by the borrower (at the time
of the loan application) to be for the pur­
pose of repairing, rehabilitating, or remod­
eling a dwelling; and
(2) is classified by the financial institution
as a home-improvement loan.

Home-purchase loan

(g)
means any loan se­
cured by and made for the purpose of pur­
chasing a dwelling.
(h)

2

Metropolitan statistical area or MSA




Regulation C
means a metropolitan statistical area or a pri­
mary metropolitan statistical area, as defined
by the U.S. Office of Management and
Budget.

SECTION 203.3—Exempt Institutions

Exemption based on asset size or location.

(a)
A financial institution is exempt from the re­
quirements of this regulation for a given cal­
endar year if on the preceding December 31—
(1) the institution had neither a home of­
fice nor a branch office in an MSA; or
(2) in the case of a bank, savings associa­
tion, or credit union, the institution’s total
assets were $10 million or less; or
(3) in the case of a for-profit mortgage­
lending institution (other than a bank, sav­
ings association, or credit union), the total
assets of the institution combined with
those of any parent corporation were $10
million or less.

Exemption based on state law.

(b)
(1) A
state-chartered or state-licensed financial
institution is exempt from the requirements
of this regulation if the Board determines
that the institution is subject to a state dis­
closure law that contains requirements sub­
stantially similar to those imposed by this
regulation and contains adequate provisions
for enforcement.
(2) Any state, state-chartered, or statelicensed financial institution, or association
of such institutions may apply to the Board
for any exemption under this paragraph.
(3) An institution that is exempt under
this paragraph shall submit the data re­
quired by the state disclosure law to its
state supervisory agency for purposes of
aggregation.

Loss of exemption.

(c)
(1) An institution los­
ing an exemption that was based on asset
size or location under paragraph (a) of this
section shall comply with this regulation
beginning with the calendar year following
the year in which it lost its exemption.
(2) An institution losing an exemption
that was based on state law under para­
graph (b) of this section shall comply with
this regulation beginning with the calendar

§ 203.5

Regulation C
year following the year for which it last re­
ported loan data under the state disclosure
law.

nated by a bank, savings association, or
credit union with assets on the preceding
December 31 of $30 million or less.

Optional data.

SE C T IO N 203.4— Compilation o f Loan
D ata

Data format and itemization.

(a)
A financial
institution shall collect data regarding appli­
cations for, and originations and purchases of,
home-purchase loans (including refinancings)
and home-improvement loans for each calen­
dar year. These data shall be presented on a
register in the format prescribed in appendix
A and shall include the following items:
(1) A number for the loan or loan applica­
tion, and the date the application was
received.
(2) The type and purpose of the loan.
(3) The owner-occupancy status of the
property to which the loan relates.
(4) The amount of the loan or application.
(5) The type of action taken, and the date.
(6) The location of the property to which
the loan relates, by MSA, state, county, and
census tract, if the institution has a home or
branch office in that MSA.
(7) The race or national origin and sex of
the applicant or borrower, and the income
relied upon in processing the loan
application.
(8) The type of entity purchasing a loan
that the institution originates or purchases
and then sells within the same calendar
year.
(b) Collection of data on race or national ori­
gin, sex, and income.
(1) A financial institution shall collect
data about the race or national origin and
sex of the applicant or borrower as pre­
scribed in appendix B. If the applicant or
borrower chooses not to provide the infor­
mation, the lender shall note the data on
the basis of visual observation or surname,
to the extent possible.
(2) Race or national origin, sex, and in­
come data may but need not be collected
for—
(i) loans purchased by the financial in­
stitution; or
(ii) applications received or loans origi­




(c)
A financial institution may
report the reasons it denied a loan application.

Excluded data.

(d)
A financial institution
shall not report—
(1) loans originated or purchased by the
financial institution acting in a fiduciary ca­
pacity (such as trustee);
(2) loans on unimproved land;
(3) temporary financing (such as bridge or
construction loans);
(4) the purchase of an interest in a pool of
loans (such as mortgage-participation cer­
tificates); or
(5) the purchase solely of the right to serv­
ice loans.

SECTION 203.5—Disclosure and
Reporting

Reporting requirements.

(a)
By March 1 fol­
lowing the calendar year for which the loan
data are compiled, a financial institution shall
send two copies of its complete register to the
agency office specified in appendix A of this
regulation, and shall retain a copy for its rec­
ords for a period of not less than two years.

Disclosure to the public.

(b)
A financial insti­
tution shall make its mortgage-loan disclosure
statement (to be prepared by the Federal Fi­
nancial Institutions Examination Council)
available to the public no later than 30 calen­
dar days after the institution receives it from
its supervisory agency. The financial institu­
tion shall make the statement available to the
public for a period of five years.

Availability of disclosure statement.

(c)
A fi­
nancial institution shall make the disclosure
statement available at its home office. If it has
a physical branch office in other MSAs, it
shall also make a statement available in at
least one branch office in each of those MSAs;
the statement at a branch office need only con­
tain data relating to property in the MSA
where that branch office is located. An institu­
tion shall make the disclosure statement avail­
able for inspection and copying during the

3

Regulation C

§ 203.5
hours the office is normally open to the public
for business. It may impose a reasonable
charge for photocopying services.

Notice of availability.

(d)
A financial institu­
tion shall post a general notice about the
availability of its disclosure statement in the
lobbies of its home office and any physical
branch offices located in an MSA. Upon re­
quest, it shall promptly provide the location of
the institution’s offices where the statement is
available. At its option, an institution may in­
clude the location in its notice.

SECTION 203.6—Enforcement

Administrative enforcement.

(a)
A violation
of the act or this regulation is subject to ad­
ministrative sanctions as provided in section
305 of the act. Compliance is enforced by the
agencies listed in appendix A of this
regulation.

Bona fide errors.

(b)
An error in compiling
or recording loan data is not a violation of the
act or this regulation if it was unintentional
and occurred despite the maintenance of pro­
cedures reasonably adopted to avoid such
errors.

Instructions to Lending Institutions

I. General
A. Who must file a report
1. Subject to some exceptions that are dis­
cussed below, banks, savings associations,
credit unions, and other mortgage-lending
institutions must complete a register listing
data about loan applications received, loans
originated, and loans purchased if on the
preceding December 31 the institution—
a. had assets of more than $10 million,
and
b. had a home or a branch office in a
“metropolitan statistical area” or a “pri­
mary metropolitan statistical area” (both
are referred to in these instructions by
the term “MSA”).
If on December 31, 1989, you
had a home or a branch office in an MSA
and your assets exceeded $10 million, you
must complete a register that lists the
home-purchase and home-improvement
loans that you originate or purchase during
calendar year 1990, and also lists applica­
tions that did not result in an origination.
2. You need not complete a register— even
if the tests for asset size and location are
met— if your institution is a bank, savings
association, or credit union and it made
first-lien home-purchase loans on one- to
four-family dwellings in the preceding cal­
endar year.
3. You need not complete a register— even if
the tests for asset size and location are met—
if your institution is a for-profit mortgage
lender (other than a bank, savings associa­
tion, or credit union) and the home-purchase
loans that you originated in the preceding
year came to less than 10 percent of your
total loan volume, measured in dollars.
4. If you are a for-profit mortgage lender
(other than a bank, savings association, or
credit union) the asset test is based on the
combined assets of your institution and any
parent corporation.
5. If you are the subsidiary of a bank or
savings association, you must complete a
separate register for your institution and
submit it, directly or through your parent,
to the agency that supervises your parent.

Example:

no

APPENDIX A— Form and Instructions
for Loan/Application Register
Loan/Application Register Form
Public reporting burden for this collection of
information is estimated to vary from 10 to
750 hours per response, with an average of
120 hours per response, including time to
gather and maintain the data needed and to
review instructions and complete the informa­
tion collection. Send comments regarding this
burden estimate or any other aspect of this
collection of information, including sugges­
tions for reducing the burden, to Secretary,
Board of Governors of the Federal Reserve
System, Washington, D.C. 20551; and to the
Office of Information and Regulatory Affairs,
Office of Management and Budget, Washing­
ton, D.C. 20503.
4




Regulation C

Appendix A

Institutions exempted from HMDA.

B.
Insti­
tutions that are specifically exempted by the
Federal Reserve Board from complying with
federal law because they are covered by a sim­
ilar state law on mortgage loan disclosures
must use the disclosure form required by their
state law.
C.

Format
1. You must use the format of this loan/
application register, but you are not re­
quired to use the form itself. For example,
you may produce a computer printout in­
stead. The layout must conform exactly,
however, to that of this register, including
the order of columns, column headings, etc.
Or you may submit the data in machinereadable form (see paragraph D.2. below).
2. The required data are to be entered in
the register for each loan origination, each
application acted upon during the calendar
year, and each loan purchased. Your insti­
tution will have to decide on the procedure
it wants to follow— whether to begin enter­
ing the required data when an application is
received, or to enter the data when final ac­
tion is taken (such as when a loan goes to
closing or an application is denied). Keep
in mind that an application is to be reported
in the calendar year when final action is
taken. Loan originations are to be reported
in the year they go to closing; do not report
applications for loans that have been ap­
proved but that have not yet gone to closing
at year-end.
3. Your institution may use separate regis­
ters at different branches, or separate regis­
ters for different loan types (such as for
home-purchase
or home-improvement
loans, or for loans on multifamily dwell­
ings). But you must submit the registers to
your supervisory agency
with the prescribed transmittal sheet; and
an officer of your institution must certify to
the accuracy of the data.
4. Entries need
be grouped by MSA, or
chronologically, or by census-tract num­
bers, or in any other particular order. But
make sure the application or loan numbers
(discussed under paragraph Il.C .l.a. be­
low) are unique. If separate registers are be­
ing maintained in various branches, your

in one package,

not




institution could add a letter code to identi­
fy different branches, or assign series of
numbers to each branch, to avoid duplicate
numbers.
5. Number each page of your report, indi­
cating the total number of pages (for exam­
ple, “Page 1 of 24”).
D. Submission of report; release of disclosure
statements
1. You must submit the register to the of­
fice specified by your federal supervisory
agency no later than March 1 following the
calendar year for which the data are com­
piled. A list of the agencies appears at the
end of these instructions.
2. Institutions are encouraged to submit
data in machine-readable form. Contact
your federal supervisory agency for infor­
mation regarding electronic submission.
3. If you submit your register in hard copy,
you must send two copies.
4. The FFIEC (Federal Financial Institu­
tions Examination Council) will prepare a
disclosure statement from the data that you
submit. Your disclosure statement will be
returned to you at the address that you in­
dicate on the transmittal sheet. When you
receive that disclosure statement you must
make a copy available for inspection by the
public within 30 calendar days. You must
make it available at your home office and, if
you have physical branch offices in other
MSAs, at one branch office in each of those
MSAs. (Your agency can provide you with
HMDA posters that you can use to inform
the public of the availability of your disclo­
sure statement.)

II. Completion of Register
A. Data to be shown
1. Show the data on home-purchase and
home-improvement loans that you originat­
ed (or that were originated in your name)
and loans that you purchased during the
calendar year covered by the report. Report
these data even if the loans were subse­
quently sold. Include refinancings of home
purchase loans.
2. For these same types of loans, show the
data for applications that did not result in
originations—for example, applications

5

Appendix A
that your institution denied or that the ap­
plicant withdrew during the calendar year
covered by the report. Include applications
that were received in the previous calendar
year but not acted upon until the calendar
year covered by the register.

Data to be excluded.

B.
Do not report the
following loans or applications for loans:
1. Loans that, although secured by real es­
tate, are made for purposes other than
home purchase, home improvement, or refi­
nancing (for example, do not report a loan
secured by residential real property for pur­
poses of financing college tuition, a vaca­
tion, or business operations);
2. Loans received in a fiduciary capacity
(for example, by your trust department);
3. Loans on unimproved land;
4. Construction or bridge loans and other
temporary financing;
5. The purchase of an interest in a pool of
loans (such as mortgage-participation cer­
tificates); or
6. The purchase solely of the right to serv­
ice loans.

Itemization of data.

C.
Your loan/application register must include the following:1
1.

Application or loan information.
Application or loan number.

a.
Enter
an identifying number or code that can
be used later to retrieve the loan or appli­
cation file. It can be any number of your
choosing (not exceeding 25 characters).
You may use letters, numerals, or a com­
bination of both. But make sure that all
numbers are unique within your institu­
tion. If your register contains data for
branch offices, for example, you could
use codes to identify the loans or applica­
tions of particular branches, or could as­
sign certain series of numbers to particu­
lar branches to avoid duplicate numbers.
b.
Enter the
date the loan application was received by
your institution by month, day, and year,
using numerals (for example, 02/28/90).
Or if your institution normally records
the date shown on the application form,
you may use that date. Enter “NA” for
loans purchased by your institution.

Date application received.

6




Regulation C

Type.

c.
Indicate the type of loan (or
loan application) by entering the applica­
ble code from the following:
1— Conventional (any loan other than
FHA, VA or FmHA loans)
2— FHA-insured (Federal
Housing
Administration)
3— VA-guaranteed (Veterans Admin­
istration)
4 — FmHA-insured (Farmers Home
Administration)

Purpose.

d.
Indicate the purpose of the
loan or application by entering the appli­
cable code from the following:
1— Home purchase (one- to four-family)
2— Home improvement (one- to fourfamily)
3— Refinancing (home purchase, one- to
four-family)
4 — Multifamily dwelling (home pur­
chase, home improvement, and
refinancings)
e.

Explanation of purpose codes.
Code 1: Home purchase
i. This code applies to loans made, and
to applications for loans, for the pur­
pose o f purchasing a residential dwell­
ing for one to four families, if the loan
is secured by a lien.

ii. At your option, you may use code 1
for loans that are made for homeimprovement purposes but are secured
by a first lien, if you normally classify
such first-lien loans as home-purchase
loans.

Code 2: Home improvement

i. Code 2 applies to loans and applica­
tions for loans that (1) the borrowers
have said will be used for repairing, re­
habilitating, or remodeling one- to
four-family residential dwellings, and
(2) are recorded on your books as
home-improvement loans.
ii. Report both secured and unsecured
loans.
iii. At your option, you may record a
home-equity line of credit as a homeimprovement loan if the borrower or
applicant indicates at the time of appli­
cation or when the account is opened

Regulation C

Appendix A

that some portion of the proceeds will
be used for home improvement. (For
such credit lines, under “Amount” in
paragraph g. below, enter only that
portion of the line which the borrower
or applicant indicates will be for homeimprovement purposes.) Report only
in the year the line is established.

Code 3: Refinancings

i. Use this code only for refinancings
of home-purchase loans on one- to
four-family residential dwellings.
ii. Use this code whether or not you
were the original creditor on the loan
being refinanced, and whether or not
the refinancing results in an increase in
the outstanding principal.
iii. Report the full amount of a refi­
nancing if more than 50 percent of the
loan proceeds is for home purchase or
home improvement. You may treat the
amount that is equivalent to the un­
paid principal of the original loan as
being for home purchase.

Code 4: Multifamily dwelling

i. Use this code for loans and loan ap­
plications on dwellings for five or more
families, including home-purchase
loans, refinancings, and loans for re­
pairing, rehabilitation, and remodeling
purposes.
ii. Do not use this code for loans on
individual condominium or coopera­
tive units; use codes 1, 2, or 3 for such
loans, as applicable.
f.
Use the applicable code to
indicate whether the property to which the
loan or loan application relates is to be
owner-occupied as a principal dwelling.

Occupancy.

1— Owner-occupied as a
dwelling
2— Not owner-occupied
3— Not applicable

principal

i. Use code 2 for loans on second
homes or vacation homes, as well as on
rental properties.
ii. Use code 2 only for nonoccupant
loans or applications related to one- to
four-family dwellings (including indi­
vidual condominium or cooperative
units).




iii. Use code 3 if the property to which
the loan relates is a multifamily dwell­
ing; is not located in an MSA; or is
located in an MSA in which your insti­
tution has neither a home nor a branch
office.
iv. For purchased loans, you may as­
sume that the property will be owneroccupied as a principal dwelling unless
the loan documents or application con­
tain information to the contrary.
g.
Enter the amount of the loan
or application. Round to the nearest
thousand ($500 should be rounded up to
$1,000). Show in terms of thousands; for
example, a loan for $167,300 should be
entered as 167.
i. For home-purchase loans that you
originate, “amount” means the origi­
nal principal amount of the loan. For
home-purchase loans that you pur­
chase, “amount” means the unpaid
principal balance of the loan at the
time of purchase.
ii. For
home-improvement
loans
(both originations and purchases),
you may include unpaid finance
charges in the amount if that is how
you record such loans on your books.
iii. For lines of credit secured by home
equity, include only that portion of the
line indicated by the applicant or bor­
rower at the time the application is
made or when the account is opened as
being for the purpose of home im­
provement. Report only in the year the
line is established.
iv. For a loan application that was de­
nied or withdrawn, enter the amount
applied for.
v. If you offered to lend less than the
applicant applied for, enter the amount
of the loan if the offer was accepted by
the applicant. If the offer was not ac­
cepted, enter the amount initially ap­
plied for.

Amount.

Action taken.

2.
Indicate the type of action
taken on the application or loan by using
the following codes:
1—Loan originated

7

Appendix A
2— Application approved but not accepted
by applicant
3— Application denied
4— Application withdrawn
5— File closed for incompleteness
6— Loan purchased by your institution

Type of action taken.

a.
Do not report
any loan application still pending at the
end of the calendar year. You will report
that application in your register for the
year final action is taken.
i. Use code 2 where an application has
been approved by you, but where the
applicant fails to respond to your noti­
fication of approval or your commit­
ment letter within the specified time.
ii. Use code 4 only when an applica­
tion has been expressly withdrawn by
the applicant.
iii. Use code 5 if you sent a written
notice of incompleteness under section
202.9(c) of Regulation B (Equal
Credit Opportunity) and if the appli­
cant failed to respond to your request
for additional information within the
period of time specified in your notice.
b.
Enter the date by month, day,
and year, using numerals (for example,
02/28/90).
i. For loans originated, enter the set­
tlement or closing date.
ii. For applications denied, applica­
tions approved but not accepted by the
applicant, and files closed for incom­
pleteness, enter the date that the action
was taken by your institution or the
date the notice was sent to the
applicant.
iii. For applications withdrawn, enter
the date that you received the appli­
cant’s express withdrawal; or you may
enter the date shown on the notifica­
tion from the applicant, in the case of a
written withdrawal.

Date.

Property location.

3.
In these columns you
will enter the applicable codes for the MSA,
state, county, and census-tract locations for
the property to which a loan relates. (See
paragraph e. below for treatment of loans
on property outside the MSAs in which you
have offices.)
8




Regulation C

MSA.

a.
For each loan or loan applica­
tion, indicate the location of the property
by the MSA number. Enter only the
MSA number, not the MSA name. MSA
boundaries are defined by the U.S. Office
of Management and Budget; use the
boundaries that were in effect on January
1 of the calendar year for which you are
reporting.
b.
Use the two-digit
numerical code for state and the threedigit numerical code for county available
from your regional supervisory agency.
Use only these established codes. Do not
use the abbreviations used by the U.S.
Postal Service.
c.
Indicate the census tract
in which the property is located.
i. Enter the code “NA” if the property
is located in an area not divided into
census tracts on the U.S. Census Bu­
reau’s census-tract outline maps (see
paragraph d. below).
ii. If the property is located in a coun­
ty with a population of 30,000 or less
in the 1980 census, enter “NA” or en­
ter the census-tract number. To deter­
mine population, use the Census Bu­
reau’s PC80-1-A population series
even if the population has increased
above 30,000 since 1980.
d.
To determine
the census-tract number, consult the U.S.
Census Bureau’s census-tract outline
maps. You must use the maps from the
Census Bureau’s PHC80-2 series for the
1980 census, or equivalent 1980 census
data from the Census Bureau (such as
G B F/D IM E files) or from a private pub­
lisher. You will continue to use the maps
in the 1980 series until you are advised
differently by your supervisory agency,
even if more current maps are available.
e.
For loans on property
located outside the MSAs in which you
have a home or branch office (or outside
any MSA), you may either enter the
code “NA” in the MSA, state, county,
and census-tract columns or enter the
data. Keep in mind that if your are a forprofit mortgage-lending institution (oth­
er than a bank, savings association, or

State and county.

Census tract.

Census-tract number.

Outside MSA.

Regulation C

Appendix A

credit union) and ( 1 ) you received five
o r more loan applications or (2 ) origi­
nated or purchased five or more homepurchase or home-improvement loans in
an M SA in the preceding year, you
these columns because you are
considered to have a branch office in that
M SA , whether or not you have a physical
office there.

complete

must

Race or national origin, sex, and income.

4.
Appendix B o f Regulation C contains in­
structions for the collection o f data on race
or national origin and sex, and also contains
a sample form for data collection. Y o u may
also use the form that you use to obtain
data on race or national origin and sex un­
der section 202.13 o f Regulation B.

Applicability.

a.
Y ou must report this in­
form ation concerning applicants for
loans that you originate and applications
that you receive.
i. Y o u need not collect or report this
inform ation for loans purchased; if you
choose not to, enter the appropriate
code specified in the lists under para­
graphs c., d., and e. below for “not
applicable.”
ii. I f your institution is a bank, savings
association, or credit union that had
assets o f $30 million or less on the pre­
ceding Decem ber 31, you may— but
need not— collect and report these
data. I f you choose not to, enter the
appropriate codes specified in the lists
under paragraphs c., d., and e. below
for “not applicable.”
iii. I f the borrower or applicant is not
a natural person (a corporation or
partnership, for exam ple), use the ap­
propriate code under paragraphs c., d.,
and e. below for “not applicable.”
b.

Telephone and mail applications.

Any

application form s mailed to applicants
must contain a collection form sim ilar to
that shown in appendix B , and you must
record the data on race or national origin
and sex if the applicant provides it. I f the
applicant chooses not to provide the
data, enter the applicable code number
for “inform ation not provided by appli­




cant in mail or telephone application”
under paragraphs c. and d. below.
c.
Use the following codes to in­
dicate the race or national origin of the
applicant or borrower under column “A”
and of any co-applicant or co-borrower
under column “CA.” If there is more
than one co-applicant, provide this infor­
mation only for the first co-applicant list­
ed on the application form.

Race or national origin of borrower or
applicant.

1— American Indian or Alaskan Native
2— Asian or Pacific Islander
3— Black
4 —Hispanic
5— White
6— Other
7— Information not provided by appli­
cant in mail or telephone application
8— Not applicable

Sex of borrower or applicant.

d.
Use the
following codes to indicate the sex of the
applicant or borrower under column “A”
and of any co-applicant or co-borrower
under column “CA.” If there is more
than one co-applicant, provide this infor­
mation only for the first co-applicant list­
ed on the application form:
1— Male
2— Female
3— Information not provided by appli­
cant in mail or telephone application
4 —Not applicable

Income.

e.
Enter the income that your
institution relied upon in making the
credit decision.
i. Round all dollar amounts to the
nearest thousand (round $500 up to
the next $1,000), and show in terms of
thousands. For example, $35,550
should be reported as 36.
ii. For loans on multifamily dwellings,
enter “NA.”
iii. If no income is asked for or relied
on in the credit decision (such as in
“no income verification” type loans),
enter “NA.”

Type of purchaser.

5.
For loans originated
or purchased and then sold within the same

9

Appendix A
calendar year, enter the applicable code to
indicate the secondary market entity:
0— Loan was not sold in calendar year cov­
ered by register
1— FNMA (Federal National Mortgage
Association)
2— GNMA (Government National Mort­
gage Association)
3— FHLMC (Federal Home Loan Mort­
gage Corporation)
4 — FmHA
(Farmers
Home
Administration)
5— Commercial bank
6— Savings bank or savings association
7— Life insurance company
8— Affiliate institution
9— Other type of purchaser
a. If you originated or purchased a loan
and did not sell the loan that same calen­
dar year, enter code 0.
b. If you sell a loan in a succeeding year,
you need not report the sale.
c. If you conditionally assign a loan to
GNMA in connection with a mortgagebacked security transaction, use code 2.
d. Loans “swapped” for mortgagebacked securities are to be treated as
sales; enter the type of entity receiving
the loans that are swapped as the
purchaser.
e. Use code 8 for loans sold in the same
year to an institution affiliated with you,
such as a subsidiary or a parent
corporation.

Reasons for denial

6.
You need not enter
the reasons for the denial of an application.
But if you wish to do so, you may indicate
up to three reasons by using the following
codes:1

Regulation C
I f your institution uses the model form for
adverse action supplied in the appendix to
Regulation B (F o rm C -l in appendix C,
Sample N otification Form , which offers
some 20 reasons for denial), the following
list shows which codes to use.
a. U se code 1 for: Incom e insufficient for
amount o f credit requested, and Exces­
sive obligations in relation to income.
b. U se code 2 for: Tem porary or irregu­
lar
employment,
and
Length
of
employment.
c. U se code 3 for: Insufficient number o f
credit references provided; U nacceptable
type o f credit references provided; No
credit file; Lim ited credit experience;
P oor credit perform ance with us; D elin­
quent past or present credit obligations
with others; Garnishm ent, attachm ent,
foreclosure, repossession, collection ac­
tion, or judgm ent; and Bankruptcy.
d. U se code 4 for: Value or type o f col­
lateral not sufficient.
e. U se code 6 for: U nable to verify credit
references, U nable to verify employment,
U nable to verify incom e, and U nable to
verify residence.
f. Use code 7 for: Credit application
incom plete.
g. U se code 9 for: Length o f residence,
Tem porary residence, and Other.

III. Federal Supervisory Agencies
Send your loan/application register and direct
any questions to the office o f your federal su­
pervisory agency specified below. I f you are
the subsidiary o f a bank, savings association,
or credit union, send the register to the super­
visory agency for your parent institution.

National banks and their subsidiaries. D istrict
office o f the Office o f the Com ptroller o f the

Currency serving the district in which the na­
1—
Debt-to-income ratio
tional bank or subsidiary is located.
2—
Employment history
3— Credit history
4 — Collateral
5—
Insufficient cash (downpayment, clos­
Federal Reserve
ing costs)
Bank serving the district in which the state
6—
Unverifiable information
mem ber bank or subsidiary is located.
7— Credit application incomplete
8— Mortgage insurance denied
Regional
9— Other

State member banks of the Federal Reserve
System, their subsidiaries, and subsidiaries of
bank holding companies.

10




Nonmember insured banks (except for federal
savings banks) and their subsidiaries.

Regulation C
director o f the Federal Deposit Insurance
Corporation for the region in which the bank
o r subsidiary is located.

Appendix A

Credit unions.

N ational Credit U nion A dm in­
istration, Office o f Exam ination and Insur­
ance, 1776 G Street, N .W ., W ashington, D .C .
20456.

Savings institutions insured under the Savings Other depository
Association Insurance Fund of the FDIC; fed­ tor o f the Federal institutions. Regional direc­
erally chartered savings banks insured under tion for the regionDeposit Insurance Corpora­
in which the institution is
the Bank Insurance Fund of the FDIC (but not located.
including state-chartered savings banks in­
sured under the Bank Insurance Fund), their Other mortgage lending institutions. Assistant
subsidiaries, and subsidiaries of savings institu­ Secretary for Housing, H M D A Reporting—
tion holding companies. T o the district or oth­ Room 9233, U .S. Departm ent o f Housing and
er office specified by the Office o f Thrift
Supervision.




U rban Development, 451 7th Street, S.W .,
W ashington, D .C . 20410.

11

Appendix A

Regulation C

Form FR HMDA-LAR
OMB No. 71000247. Approval axpirw Dwwnbor 31, 1902
Hours por rssponse: 10-750 (120 svsrsgo)
This rsport Is rsquirwJ by law (12 USC 2801-2810 and 12 CFR 203)

LOAN/APPLICATION REGISTER

C ontrol Number (agency use only)

I I I l I I I l i II - U

T R A N S M IT T A L S H E E T

You mu*t complete this transmittal shoot (pioaso typo or print) and attach It to the Loan/Application Raglstar,
required by tha Homo Mortgage Disclosure Act, that you submit to your supsrvtsory agency.

The Loan/Applicatlon Register that is attached covers activity during 19___ and contains a total o f ____pages.
Enter the name and adress of your Institution. The disclosure statement that is produced by the Federal
Financial Institutions Examination Council w ill be mailed to the address you supply below;

Name

Address

City, State, ZIP

Enter the name and telephone number of a person who may be contacted if questions arise regarding your
report:

Name

Telephone Number

If your institution is a subsidiary of another institution or corporation, enter the name of your parent:

Name

Address
City, State, ZIP

Enter the name and address of your supervisory agency:

Name

Address

City, State, ZIP

An o fficer of your institution must complete the follow ing section.
I certify to the accuracy of this report.

Name of O fficer

12



Signature

Date

V
Form FR HMDA-LAR

P a g e ___ of____

Name of Reporting Institution

Date
Application
Received
(mm/dd/yy)

Type

Purpoae

Occu­
pancy

Amount
in
thou­
sands

Applicant Information
A ■ Applicant
CA ■ Co-Applicant

Property Location

Action Taken

Race or
National Origin
Type

(mm/dd/yy)

MSA
Number

State
Code

County
Code

Census
Tract

A

CA

8ax
A

in
thouCA

Type of
Purchaser
of Loan

»saaon(s)
lor
Denial
(Optional)

Appendix A




Control number (agency uee only)

City end State

Application or
Loan Information

Application or
Loan Number

Regulation C

LOAN/APPLICATION REGISTER

____________________________________________________________ _________________________________________________________________

Regulation C

Appendix A
Loan/A pplication Register
U se the following codes to com plete the lo a n /
application register. T he instructions explain
the proper use o f each code.

Application or Loan Information
Type:
1—

Conventional (any loan other than
F H A , V A or Fm H A loans)
2— FH A -insured
(Federal
Housing
A dm inistration)
3— VA-guaranteed
(Veterans
A dm in­
istration)
4 — Fm H A -insured
(Farm ers
Home
A dm inistration)

Purpose:
1— H om e purchase (one- to four-fam ily)
2— Home improvement (one- to fourfam ily)
Refinancing (hom e purchase, one- to
four-fam ily)
4 — M ultifam ily dwelling (hom e purchase,
home improvement, and refinancings)
3—

O ccupancy:
1— Owner-occupied as a principal dwelling
2— N ot owner-occupied
3— N ot applicable
A ction Taken:
1— Loan originated
2— A pplication approved but not accepted
by applicant
3— A pplication denied
4 — Application withdrawn
5—
File closed for incompleteness
6— Loan purchased by your institution

Applicant Information
R ace or N ational Origin:
1— A m erican Indian or Alaskan Native
2— Asian or Pacific Islander

14



3—
4—
5—
6—
7—

Black
Hispanic
White
Other
Information not provided by applicant
in mail or telephone application
8— Not applicable

Sex:

1—
2—
3—

Male
Female
Information not provided by applicant
in mail or telephone application
4 — Not applicable

Type of Purchaser
0—

Loan was not sold in calendar year cov­
ered by register
1— FNMA (Federal National Mortgage
Association)
2— GNMA (Government National Mort­
gage Association)
3— FHLMC (Federal Home Loan Mort­
gage Corporation)
4 — FmHA (Farmers Home Admini­
stration)
5— Commercial bank
6— Savings bank or savings association
7— Life insurance company
8— Affiliate institution
9— Other type of purchaser

Reasons for Denial
1— Debt-to-income ratio
2— Employment history
3— Credit history
4 — Collateral
5— Insufficient cash (downpayment, clos­
ing costs)
6— Unverifiable information
7— Credit application incomplete
8— Mortgage insurance denied
9— Other

Regulation C
A P P E N D IX B — Form and Instructions
for D ata Collection on R ace or National
Origin and Sex

I. Instructions on Collection of Data on Race
or National Origin and Sex
Format.

A.
You may list questions regarding
the race or national origin and sex of the ap­
plicant on your loan application form, or on a
separate form that refers to the application.
(See the sample form below for recommended
language.)
B.

Procedures.
1. You must ask for this information, but
cannot require the applicant to provide it.
2. If the applicant chooses not to provide
the information for an application taken in
person, note this fact on the form and note
the data, to the extent possible, on the basis
of visual observation or surname.
3. Inform the applicant that the federal
government is requesting this information
in order to monitor compliance with federal
statutes that prohibit lenders from discrimi­
nating against applicants on these bases. In­
form the applicant that if the information is
not provided where the application is taken
in person, you are required to note the data
on the basis of visual observation or
surname.
4. If an application is made entirely by tele­
phone, you need not request this informa­
tion. And you need not provide the data
when you take an application by mail, if the
applicant fails to answer these questions on
the application form. You should indicate
whether an application was received by
mail or telephone, if it is not otherwise evi­
dent on the face of the application.
5. The “other” block is available only to
the applicant who chooses to indicate some
other appropriate category for race or na­
tional origin. If completing the form based
on visual observation, do not use this cate­
gory; use one of the other five categories.




Appendix B
Sample D ata-Collection Form
INFORMATION FOR GOVERNMENT
MONITORING PURPOSES
The following information is requested by the
federal government for certain types of loans
related to a dwelling in order to monitor the
lender’s compliance with equal credit oppor­
tunity, fair housing, and home mortgage dis­
closure laws. You are not required to furnish
this information, but are encouraged to do so.
The law provides that a lender may not dis­
criminate on the basis of this information, or
on whether you choose to furnish it. However,
if you choose not to furnish the information
and you have made this application in person,
under federal regulations the lender is re­
quired to note race or national origin and sex
on the basis of visual observation or surname.
If you do not wish to furnish the information,
please check below.
APPLICANT:
| | I do not wish to furnish this information.
Race or National Origin:
] American Indian, Alaskan Native
[H Asian, Pacific Islander
| | Black
□
Hispanic
| [ White
] Other (specify) _____________________
Sex:
| Female
Q Male
CO-APPLICANT:
□

I do not wish to furnish this information.

Race or National Origin:
| American Indian, Alaskan Native
j Asian, Pacific Islander
[71 Black
[[] Hispanic
[[] White
[[] Other (specify) _____________________
Sex:
Q Female
[T Male

15




Home Mortgage Disclosure Act
12 U SC 2801 et seq.; 89 Stat. 1125; Pub. L . 9 4 -2 0 0 , Title III (D ecem ber 31, 1975)

>

T IT L E I I I — H O M E M O R T G A G E
D IS C L O S U R E
Section
301 Short title
302 Findings and purposes
303 Definitions
304 Maintenance of records and public
disclosure
305 Enforcement
306 Relation to state laws
307 Research and improved methods
308 Study
309 Effective date
310 Compilation of aggregate data
311 Disclosure by the secretary
SE C T IO N 301— Short Title
This title may be cited as the “Home Mort­
gage Disclosure Act of 1975.”
[12 USC 2801 note.]

SE C T IO N 302— Findings and Purposes
(a) The Congress finds that some depository
institutions have sometimes contributed to the
decline of certain geographic areas by their
failure pursuant to their chartering responsi­
bilities to provide adequate home financing to
qualified applicants on reasonable terms and
conditions.
(b) The purpose of this title is to provide the
citizens and public officials of the United
States with sufficient information to enable
them to determine whether depository institu­
tions are filling their obligations to serve the
housing needs of the communities and neigh­
borhoods in which they are located and to as­
sist public officials in their determination of
the distribution of public sector investments in
a manner designed to improve the private in­
vestment environment.
(c) Nothing in this title is intended to, nor
shall it be construed to, encourage unsound
lending practices or the allocation of credit.
[12 USC 2801.]




SE C T IO N 303— Definitions
For purposes of this title—
(1) the term “mortgage loan” means a
loan which is secured by residential real
property or a home improvement loan;
(2) the term “depository institution”—
(A ) means—
(i) any bank (as defined in section
3 (a )(1 ) of the Federal Deposit Insur­
ance Act);
(ii) any savings association (as de­
fined in section 3 (b )(1 ) of the Federal
Deposit Insurance Act); and
(iii) any credit union,
which makes federally related mortgage
loans as determined by the Board; and
(B ) includes any other lending institu­
tion (as defined in paragraph (4 )) other
than any institution described in subpara­
graph (A );
(3) the term “completed application”
means an application in which the creditor
has received the information that is regular­
ly obtained in evaluating applications for
the amount and type of credit requested;
(4) the term “other lending institutions”
means any person engaged for profit in the
business of mortgage lending;
(5) the term “Board” means the Board of
Governors of the Federal Reserve System;
and
(6) the term “Secretary” means the Secre­
tary of Housing and Urban Development.
[12 USC 2802. As amended by acts of Feb. 5, 1988 (101
Stat. 1945) and Aug. 9, 1989 (103 Stat. 525).]

SE C T IO N 304— M aintenance o f
Records and Public Disclosure
(a )(1 ) Each depository institution which has
a home office or branch office located with­
in a primary metropolitan statistical area,
metropolitan statistical area, or consolidat­
ed metropolitan statistical area that is not
comprised of designated primary metropoli­
tan statistical areas, as defined by the De­
partment of Commerce shall compile and
17

§304

Home Mortgage Disclosure Act

tical area, metropolitan statistical area, or
make available, in accordance with regula­
consolidated metropolitan statistical area
tions of the Board, to the public for in­
that is not comprised of designated primary
spection and copying at the home office,
metropolitan statistical areas shall be re­
and at least one branch office within each
primary metropolitan statistical area, met­
quired to make the information required by
this paragraph available at any such office
ropolitan statistical area, or consolidated
only to the extent that such information
metropolitan statistical area that is not
relates to mortgage loans which were
comprised of designated primary metropoli­
originated or purchased (or for which com­
tan statistical areas in which the depository
pleted applications were received) by an of­
institution has an office the number and to­
fice of that depository institution located in
tal dollar amount of mortgage loans which
the primary metropolitan statistical area,
were (A ) originated (or for which the insti­
metropolitan statistical area, or consolidat­
tution received completed applications), or
ed metropolitan statistical area that is not
(B ) purchased by that institution during
comprised of designated primary metropoli­
each fiscal year (beginning with the last full
tan statistical areas in which the office mak­
fiscal year of that institution which immedi­
ing such information available is located.
ately preceded the effective date of this
For purposes of this paragraph, other lend­
title.)
ing institutions shall be deemed to have a
(2) The information required to be main­
home office or branch office within a pri­
tained and made available under paragraph
mary metropolitan statistical area, metro­
(1) shall also be itemized in order to clearly
politan statistical area, or consolidated met­
and conspicuously disclose the following:
ropolitan statistical area that is not com­
(A ) The number and dollar amount for
prised of designated primary metropolitan
each item referred to in paragraph (1),
statistical areas if such institutions have
by census tracts for mortgage loans se­
originated or purchased or received com­
cured by property located within any
pleted applications for at least 5 mortgage
county with a population of more than
loans in such area in the preceding calendar
30,000, within that primary metropolitan
year.
statistical area, metropolitan statistical
area, or consolidated metropolitan statis­
tical area that is not comprised of desig­ (b) Any item of information relating to
nated primary metropolitan statistical ar­ mortgage loans required to be maintained un­
eas, otherwise, by county, for mortgage der subsection (a) shall be further itemized in
loans secured by property located within order to disclose for each such item—
any other county within that primary met­
(1) the number and dollar amount of
mortgage loans which are insured under ti­
ropolitan statistical area, metropolitan
statistical area, or consolidated metropol­
tle II of the National Housing Act or under
itan statistical area that is not comprised
title V of the Housing Act of 1949 or which
of designated primary metropolitan sta­
are guaranteed under chapter 37 of title 38,
United States Code;
tistical areas.
(B ) The number and dollar amount for
(2) the number and dollar amount of
each item referred to in paragraph (1)
mortgage loans madeto mortgagors who
for all such mortgage loans which are se­
did not, at the time of execution of the
cured by property located outside that
mortgage, intend to reside in the property
securing the mortgage loan;
primary metropolitan statistical area,
metropolitan statistical area, or consoli­
(3) the number and dollar amount of
home improvement loans; and
dated metropolitan statistical area that is
not comprised of designated primary
(4) the number and dollar amount of mort­
metropolitan statistical areas.
gage loans and completed applications in­
For the purpose of this paragraph, a deposi­
volving mortgagors or mortgage applicants
tory institution which maintains offices in
grouped according to census tract, income
more than one primary metropolitan statis­
level, racial characteristics, and gender.

18




Home Mortgage Disclosure Act
(c) Any information required to be compiled
and made available under this section shall be
maintained and made available for a period of
five years after the close of the first year dur­
ing which such information is required to be
maintained and made available.
(d) Notwithstanding the provisions of sub­
section (a )(1 ), data required to be disclosed
under this section for 1980 and thereafter
shall be disclosed for each calendar year. Any
depository institution which is required to
make disclosures under this section but which
has been making disclosures on some basis
other than a calendar year basis shall make
available a separate disclosure statement con­
taining data for any period prior to calendar
year 1980 which is not covered by the last full
year report prior to the 1980 calendar year
report.
(e) Subject to subsection (L ), the Board
shall prescribe a standard format for the dis­
closures required under this section.
(f) The Federal Financial Institutions Exam­
ination Council in consultation with the Sec­
retary, shall implement a system to facilitate
access to data required to be disclosed under
this section. Such system shall include ar­
rangements for a central depository of data in
each primary metropolitan statistical area,
metropolitan statistical area, or consolidated
metropolitan statistical area that is not com­
prised of designated primary metropolitan sta­
tistical areas. Disclosure statements shall be
made available to the public for inspection
and copying at such central depository of data
for all depository institutions which are re­
quired to disclose information under this sec­
tion (or which are exempted pursuant to sec­
tion 306(b)) and which have a home office or
branch office within such primary metropoli­
tan statistical area, metropolitan statistical
area, or consolidated metropolitan statistical
area that is not comprised of designated pri­
mary metropolitan statistical areas.
(g) The requirements of subsections (a) and
(b) shall not apply with respect to mortgage
loans that are—
(1) made (or for which completed applica­
tions are received) by any mortgage bank­
ing subsidiary of a bank holding company




§304
or savings and loan holding company or by
any savings and loan service corporation
that originates or purchases mortgage
loans; and
(2) approved (or for which completed ap­
plications are received) by the secretary for
insurance under title I or II of the National
Housing Act.
(h) The data required to be disclosed under
subsection (b )(4 ) shall be submitted to the
appropriate agency for each institution report­
ing under this title. Notwithstanding the re­
quirement of section 304(a) (2 ) (A ) for disclo­
sure by census tract, the Board, in cooperation
with other appropriate regulators, including—
(1) the Comptroller of the Currency for
national banks;
(2) the Director of the Office of Thrift Su­
pervision for savings associations;
(3) the Federal Deposit Insurance Corpo­
ration for banks insured by the Federal De­
posit Insurance Corporation (other than
members of the Federal Reserve System),
mutual savings banks, and any other depos­
itory institution described in section
303 (2) (A ) which is not otherwise referred
to in this paragraph;
(4) the National Credit Union Adminis­
tration Board for credit unions; and
(5) the Secretary of Housing and Urban
Development for other lending institutions
not regulated by the agencies referred to in
paragraphs (1) through (4 ),
shall develop regulations prescribing the for­
mat for such disclosures, the method for sub­
mission of the data to the appropriate regula­
tory agency, and the procedures for disclosing
the information to the public. These regula­
tions shall also require the collection of data
required to be disclosed under subsection
(b) (4) with respect to loans sold by each in­
stitution reporting under this title, and, in ad­
dition, shall require disclosure of the class of
the purchaser of such loans. Any reporting in­
stitution may submit in writing to the appro­
priate agency such additional data or explana­
tions as it deems relevant to the decision to
originate or purchase mortgage loans.
(i) The requirements of subsection (b )(4 )
shall not apply with respect to any depository
institution described in section 303 (2) (A)

19

§304
which has total assets, as of the most recent
full fiscal year of such institution, of
$30,000,000 or less.
[12 USC 2803. As amended by acts of Oct. 8, 1980 (94
Stat. 1657); Nov. 30, 1983 (97 Stat. 1266); Feb. 5, 1988
(101 Stat. 1945, 1950); and Aug. 9, 1989 (103 Stat. 524,
525, 526).]

S E C T IO N 305— Enforcement
(a) The Board shall prescribe such regula­
tions as may be necessary to carry out the
purposes of this title. These regulations may
contain such classifications, differentiations,
or other provisions, and may provide for such
adjustments and exceptions for any class of
transactions, as in the judgment of the Board
are necessary and proper to effectuate the pur­
poses of this title, and prevent circumvention
or evasion thereof, or to facilitate compliance
therewith.
(b) Compliance with the requirements im­
posed under this title shall be enforced un­
der—
(1) section 8 of the Federal Deposit Insur­
ance Act, in the case of—
(A ) national banks, by the Comptroller
of the Currency;
(B ) member banks of the Federal Re­
serve System, other than national banks,
by the Board;
(C ) banks insured by the Federal Depo­
sit Insurance Corporation (other than
members of the Federal Reserve System)
and mutual savings banks as defined in
section 3(f) of the Federal Deposit In­
surance Act (12 U.S.C. 1813(f)) and
any other depository institution not re­
ferred to in this paragraph or paragraph
(2) or (3) of this subsection, by the
Board of Directors of the Federal Depo­
sit Insurance Corporation;
(2) section 8 of the Federal Deposit Insur­
ance Act, by the Director of the Office of
Thrift Supervision, in the case of a savings
association the deposits of which are in­
sured by the Federal Deposit Insurance
Corporation;
(3) the Federal Credit Union Act, by the
Administrator of the National Credit Un­

20




Home Mortgage Disclosure Act
ion Administration with respect to any
credit union; and
(4) other lending institutions, by the Sec­
retary of Housing and Urban Development.
(c) For the purpose of the exercise by any
agency referred to in subsection (b) of its
powers under any Act referred to in that sub­
section, a violation of any requirement im­
posed under this title shall be deemed to be a
violation of a requirement imposed under that
Act. In addition to its powers under any pro­
vision of law specifically referred to in subsec­
tion (b), each of the agencies referred to in
that subsection may exercise, for the purpose
of enforcing compliance with any requirement
imposed under this title, any other authority
conferred on it by law.
[12 USC 2804. As amended by act of Aug. 9, 1989 (103
Stat. 440, 526).]

S E C T IO N 306— Relation to State Laws
(a) This title does not annul, alter, or affect,
or exempt any State-chartered depository in­
stitution subject to the provisions of this title
from complying with the laws of any state or
subdivision thereof with respect to public dis­
closure and recordkeeping by depository insti­
tutions, except to the extent that those laws
are inconsistent with any provision of this ti­
tle, and then only to the extent of the incon­
sistency. The Board is authorized to deter­
mine whether such inconsistencies exist. The
Board may not determine that any such law is
inconsistent with any provision of this title if
the Board determines that such law requires
the maintenance of records with greater geo­
graphic or other detail than is required under
this title, or that such law otherwise provides
greater disclosure than is required under this
title.
(b) The Board may by regulation exempt
from the requirements of this title any statechartered depository institution within any
state or subdivision thereof if it determines
that, under the law of such state or subdivi­
sion, that institution is subject to requirements
substantially similar to those imposed under
this title, and that such law contains adequate
provisions for enforcement. Notwithstanding

§310

Home Mortgage Disclosure Act
any other provision of this subsection, compli­
ance with the requirements imposed under
this subsection shall be enforced under—
(1) section 8 of the Federal Deposit Insur­
ance Act in the case of national banks, by
the Comptroller of the Currency; and
(2) section 8 of the Federal Deposit Insur­
ance Act, by the Director of the Office of
Thrift Supervision in the case of a savings
association the deposits of which are in­
sured by the Federal Deposit Insurance
Corporation.

[12 USC 2806. As amended by H. Res. 5 of Jan. 4, 1977
and acts of Nov. 7, 1988 (102 Stat. 3280) and Aug. 9, 1989
(103 Stat. 440).]

SE C T IO N 308— Study
The Board, in consultation with the Secretary
of Housing and Urban Development, shall re­
port annually to the Congress on the utility of
the requirements of section 304(b )(4).
[12 USC 2807. As amended by acts of Nov. 30, 1983 (97
Stat. 1266) and Aug. 9, 1989 (103 Stat. 526).]

[12 USC 2805. As amended by act of Aug. 9, 1989 (103
Stat. 440).]

SE C T IO N 309— Effective D ate
This title shall take effect on the one hundred
and eightieth day beginning after the date of
its enactment. Any depository institution
which has total assets as of its last full fiscal
( a ) (1) The Director of the Office of Thrift year of $10,000,000 or less is exempt from the
Supervision, with the assistance of the Sec­ provisions of this title.
retary, the Director of the Bureau of the
[12 USC 2808.]
Census, the Comptroller of the Currency,
the Board of Governors of the Federal Re­
serve System, the Federal Deposit Insur­
ance Corporation, and such other persons
S E C T IO N 310— Compilation o f
as the Director of the Office of Thrift Su­
Aggregate D ata
pervision deems appropriate, shall develop,
or assist in the improvement of, methods of (a) Beginning with data for calendar year
1980, the Federal Financial Institutions Ex­
matching addresses and census tracts to fa­
cilitate compliance by depository institu­ amination Council shall compile each year,
tions in as economical a manner as possible for each primary metropolitan statistical area,
metropolitan statistical area, or consolidated
with the requirements of this title.
(2) There is authorized to be appropriated metropolitan statistical area that is not com­
such sums as may be necessary to carry out prised of designated primary metropolitan sta­
this subsection.
tistical areas, aggregate data by census tract
(3) The Director of the Office of Thrift Su­ for all depository institutions which are re­
pervision is authorized to utilize, contract quired to disclose data under section 304 or
with, act through, or compensate any per­ which are exempt pursuant to section 306(b).
son or agency in order to carry out this The Council shall also produce tables indicat­
ing, for each primary metropolitan statistical
subsection.
area, metropolitan statistical area, or consoli­
(b) The Director of the Office of Thrift Su­
dated metropolitan statistical area that is not
pervision shall recommend to the Committee
comprised of designated primary metropoli­
on Banking, Finance and Urban Affairs of the
tan statistical areas, aggregate lending pat­
House of Representatives and the Committee
terns for various categories of census tracts
on Banking, Housing, and Urban Affairs of
grouped according to location, age of housing
the Senate such additional legislation as the
stock, income level, and racial characteristics.
Director of the Office of Thrift Supervision
deems appropriate to carry out the purpose of (b) The Board shall provide staff and data
processing resources to the Council to enable
this title.

SE C T IO N 307— Research and Improved
Methods




21

§310

Home Mortgage Disclosure Act

it to carry out the provisions of subsection
(a).

mation required to be made publicly available
in accordance with section 310.

(c) The data and tables required pursuant to
subsection (a) shall be made available to the
public by no later than December 31 of the
year following the calendar year on which the
data is based.

[12 USC 2810. As added by act of Oct. 8, 1980 (94 Stat.
1658) and amendedd by acts of Nov. 30, 1983 (97 Stat.
1266); Feb. 5, 1988 (101 Stat. 1945); and Aug. 9, 1989
(103 Stat. 525).]

[12 USC 2809. As added by act of Oct. 8, 1980 (94 Stat.
1658) and amended by act of Nov. 30, 1983 (97 Stat.
1266).]

P U B L IC L A W 9 6 -3 9 9 , T IT L E II I
SE C T IO N 340

S E C T IO N 311— Disclosure by the
Secretary
Beginning with data for calendar year 1980,
the Secretary shall make publicly available
data in the Secretary’s possession for each
mortgagee which is not otherwise subject to
the requirements of this title and which is not
exempt pursuant to section 306(b) (and for
each mortgagee making mortgage loans ex­
empted under section 304(g)), with respect to
mortgage loans approved (or for which com­
pleted applications are received) by the Secre­
tary for insurance under title I or II of the
National Housing Act. Such data to be dis­
closed shall consist of data comparable to the
data which would be disclosed if such mortga­
gee were subject to the requirements of section
304. Disclosure statements containing data for
each such mortgage for a primary metropoli­
tan statistical area, metropolitan statistical
area, or consolidated metropolitan statistical
area that is not comprised of designated pri­
mary metropolitan statistical areas shall, at a
minimum, be publicly available at the central
depository of data established pursuant to sec­
tion 304(f) for such primary metropolitan
statistical area, metropolitan statistical area,
or consolidated metropolitan statistical area
that is not comprised of designated primary
metropolitan statistical areas. The Secretary
shall also compile and make publicly available
aggregate data for such mortgagees by census
tract, and tables indicating aggregate lending
patterns, in a manner comparable to the infor­

22




(d) The Federal Financial Institutions Ex­
amination Council, in consultation with the
Administrator of the Small Business Adminis­
tration, shall conduct a study to assess the fea­
sibility and usefulness of requiring depository
institutions which make small business loans
to compile and publicly disclose information
regarding such loans. The Council shall sub­
mit a report on the results of such study, to­
gether with recommendations, to the Commit­
tee on Banking, Housing, and Urban Affairs of
the Senate and the Committee on Banking,
Finance and Urban Affairs of the House of
Representatives not later than March 1, 1981.
[12 USC 3305 note.]

(e) To promote efficiency and avoid duplica­
tion to the maximum extent feasible, the Fed­
eral Financial Institutions Examination Coun­
cil shall transmit a report to the Congress not
later than September 30, 1982, on the feasibili­
ty and desirability of establishing a unified
system for enforcing fair lending laws and reg­
ulations, implementing the Community Rein­
vestment Act of 1977, and satisfying the pub­
lic disclosure purposes of the Home Mortgage
Disclosure Act of 1975. Such report shall
evaluate the status and effectiveness of data
collection and analysis systems of such agen­
cies involving fair lending and community re­
investment, and shall outline possible specific
timetables for implementing such a unified
system.
[12 USC 3305 note.]

Board of Governors of the Federal Reserve System

BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL
A M E N D M E N T S T O R E G U L A T IO N Y

(Effective February 13, 1990)

FEDERAL RESERVE SYSTEM
12 CFR Part 225
[Reg. Y; Docket No. R-0686]

Bank Holding Companies and Change
in Bank Control; Procedures
Regarding Notices of Changes in
Senior Executive Officers and
Directors Under Section 914 of the
Financial Institutions Reform,
Recovery, and Enforcement Act of
1989
a g e n c y : Board of Governors of the
Federal Reserve System.
a c t io n : Interim rule with request for
public comment______________________

The Federal Reserve Board is
amending its Regulation Y, section 225
of title 12, Code of Federal Regulations,
to implement the provisions of section
914 of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989
("FIRREA”), Public Law 101-73,103 Stat.
183. Section 914 of FIRREA requires
bank holding companies and state
member banks that have recently
undergone a change in control, have less
than m inim um required capital, or are
otherwise in troubled condition to file a
notice with the Board of Governors of
the Federal Reserve System (“Board")
prior to adding a member of the board of
directors, or employing an individual as
a senior executive officer. This prior
notice requirement also applies to state
member banks that have been chartered
within two years before the proposed
management change. The Board may
disapprove any proposed board member
or senior executive officer whose
service is not considered to be in the
best interests of the depositors of the
bank or the public. The regulation
defines the terms “troubled condition"
and “senior executive officer." The
regulation also clarifies the types of
changes in control of a state member
bank or bank holding company that
require a notice under section 914, and
establishes the procedures for filing the
required notice.
Because the provisions of section 914
became effective on the date of
enactment of FIRREA, this regulation is
immediately effective.
Board
sum m ary:

The

requests comment on any issue raised
by this regulation; interested persons
have 60 days in which to respond. After
the close of the comment period, the
Board may amend the regulation in
response to the comments received.
DATES:
February 13,
1990. Comments must be received no
later than April 23,1990.
a d d r e s s e s : Comments, which should
refer to Docket No. R-0686, may be
mailed to the Board of Governors of the
Federal Reserve System, 20th and C
Streets, NW„ Washington, DC 20551,
Attention: Mr. William W. Wiles,
Secretary; or may be delivered to Room
B-2223 between 8:45 a on. and 5:00 p.m.
All comments received will be made
available to the public, and may be
inspected in Room B-1122 between 8:45
a.m. and 5:15 pan.

Effective Date:

FOR FURTHER INFORMATION CONTACT:

Scott G. Alvarez, Assistant General
Counsel (202/452-3583), or Mark J.
Tenhundfeld, Attorney (202/452-3612),
Legal Division; or Sidney M. Sussan,
Assistant Director (202/452-2638),
Division of Banking Supervision and
Regulation, Board of Governors of the
Federal Reserve System, Washington,
DC 20551. For the hearing impaired only,
Telecommunications Service for the
Deaf, Eamestine Hill or Dorothea
Thompson (202/452-3544).
SUPPLEMENTARY INFORMATION:

Background
On August 9,1989, the President
signed into law the Financial
Institutions Reform, Recovery, and
Enforcement Act of 1989 (“FIRREA”),
Public Law 101-73,103 StaL 183. Section
914 of FIRREA requires certain banks
and bank holding companies to notify
the appropriate Federal banking agency
30 days prior to the proposed addition of
any individual to the board of directors
of the bank or bank holding company,
and to the employment of any individual
as a senior executive officer.
In particular, this section requires
state member banks and bank holding
companies to provide this notice to the
Board if the state member bank or bank
holding company:
(1) Has been chartered less than 2
years in the case of a state member
bank;

(2) Has undergone a change in control
within the preceding 2-year period; or

(3) Is not in compliance with
appropriate minimum capital
requirements or is otherwise in a
“troubled condition."
The Board must disapprove a notice
under this section if the Board finds that
the competence, experience, character,
or integrity of the individual indicates
that it would not be in the best interests
of the depositors of the bank or in the
best interests of the public for the
individual to be employed by, or
associated with, the bank or bank
holding company.

This regulation implements the
provisions of section 914 of FIRREA. In
adopting this regulation, the Board has
consulted with the Office of the
Comptroller of the Currency, the Federal
Deposit Insurance Corporation, and the
Office of Thrift Supervision, each of
which must also adopt regulations under
section 914 applicable to financial
institutions that they supervise.
1. Definition of ‘TroubledCondition"

Section 914 by its terms applies to
financial institutions that are not in
compliance with the minimum capital
requirements applicable to the
institution or that are “otherwise in a
troubled condition." In the Board’s view,
compliance with applicable minimum
capital requirements includes
compliance with the generally
applicable capital adequacy guidelines
as well as compliance with any capital
directive or Board order applicable to
the specific institution, even where that
directive or order may require capital
levels above the generally applicable
minimum level in the Board’s guidelines.
Section 914 of FIRREA requires the
Board to promulgate regulations that
define the term “troubled condition" for
purposes of the notice requirements of
this section. Because section 914 already
applies by its terms to financial
institutions that are not in compliance
with applicable minimum capital
requirements, the Board’s definition of
“troubled condition" focuses on other
measures of the financial condition of
the institution. The Board defines an
institution in “troubled condition" as

PRINTED IN NEW YORK, FROM FEDERAL REGISTER, VOL. 55, NO. 39, pp. 6787-6791
[Enc. Cir. No. 10339]




any institution that: (1) Hay received a
composite rating of 4 or 5 at its most
recent commercial examination or
inspection; (2) is subject to a cease and
desist order or written agreement
requiring action to improve the financial
condition of the institution; or [3J is
expressly informed by the Board or
appropriate Federal Reserve Bank that it
is considered in troubled condition for
purposes of the notice provisions of
section 914. The Board believes that this
definition of “troubled condition” covers
only those state member banks and
bank holding companies whose financial
condition makes review of changes in
management appropriate. The regulation
contemplates that the Federal Reserve
System will expressly inform individual
state member banks and bank holding
companies if other facts indicate that
close scrutiny of changes in the
management or directors of the
institution under this subpart is
appropriate.

2. Definition of ‘'Senior Executive
Officer”

Section 914 also requires the Board to
define the term “senior executive
officer.’* The Board has adopted a
functional approach in defining the term
“senior executive officer.* The
regulation designates as a “senior
executive officer* those individuals who
have significant influence over the
policymaking decisions of financial
institutions, regardless of the
individual's title. The functions
identified by the Board as those of
senior executive officers include the
functions of chief executive officer, chief
operating officer, chief financial officer,
chief lending officer, and chief
investment officer. The Board has not
identified specific tides that constitute
“senior executive officers* because
titles for senior executive functions vary
widely among bank holding companies
and banks.
In addition to the five functions
specifically identified, the regulation
also applies to any person with
significant influence over major
policymaking decisions of the
institution. This provision is intended to
cover consultants and other individuals
who may in fact be acting as a senior
executive officer at a particular
institution.
The Board notes that Regulation O fl2
CFR part 2151, which addresses loans to
bank insiders, defines "executive
officer” to include a person who
participates i» the major polreymakmg
functions of the bank and includes, by
title, a bank's chairman o f the board,
president, vice-president, cashier,
secretary,
free surer. The new

and




statute, in contrast, reaches only “senior
executive officers." Thus, the Board
believes the scope of the new statute is
narrower than the existing definition in
Regulation O.
The Board’s regulation does not
include the appointment of an advisory
director tc an institution’s board of
directors. To qualify for this exemption
as an advisory director, an individual
must not be elected to the position by
the company’s shareholders, must not be
authorized to vote on any matters before
the board of directors* and must provide
solely general policy advice to the board
of directors. The Board and the Reserve
Bank retain authority to find in specific
cases that an individual who is
nominally an advisory director is in fact
functioning as a director or senior
executive officer for purposes of the
notice provisions of this subpaii.
The notice requirements of section 914
are applicable whenever an institution
subject to tins section seeks to add an
individual to the institution’s board of
directors. The Board believes that this
provision applies whether the addition
is made a s a resalt of expansion, of the
number of members of the board of
directors or throu^i the replacement of
existing directors. I s both cases* an
individual who w as Hot previously a
membff the board directors has
bees added to the board. Similarly, the
provisions of section 914 appear to
apply to the employment of any
individual as a senior executive officer,
whether that employment results from
external hiring or from, internal
promotion ov re-assignment of
responsibilities to include the functions
of a senior executive officer. The notice
requirement also applies to a sensor
executive officer who is proposed as a
Hirr-tnr of the institution and to a
director who is nfTpaprf employment a s a
senior executive officer.

of

of

3. Definition of C h a n g e in

C o n L rot

As noted above, the notice
requirement under section 914 is
triggered when the bank or bank holding
company has undergone a "change in
control" within two-years preceding the
proposed addition o f a director or
employment of a senior executive
officer. The term “change in control* is
not defined in section 954 or explained
in the legislative history of that section.
The Board does not believe that this
term was intended by Congress to
encompass every situation involving a
change sa ownership o f a state num ber
bank or bank holding company. For
example, the aeqmsifiow o f more than 5
percent of the voting shares of a bank by
a registered bank bolding company
requires approval of tile Board raider
2

section 3 of the Bank Holding Company
Act ("BHC Act”) but may not involve a
“change in control” for purposes of
section 914 or any other statute.
The Board believes that it is
consistent with the language and
purpose of section 914 to require that
notices be filed under this section by
state member banks raid bonk holding
companies that have been the subject of
a notice of change in control pursuant to
the Change in Bank Control Act. The
language of section 914 parallels the
Change in Bank Control Act in several
respects, most notably by using the
same terms as in the Change in Bank
Control Act and by expressly adopting
the information requirements and
standards for review contained in that
Act. Thus, section 914 appears to
contemplate situations involving a
change in control that would require a
notice under the Change in Bank Control
Act.
The Board does not befieve that, as a
general matter, transactions subject to
section o f the BHC Act should trigger
the requirements of section 914. These
transactions are expressly exempt from
the Change in Bank Control Act.
Moreover, in connec tion with the review
of all applications by bank holding
companies under the BHC A ct the
Board already care&dly considers the
managerial resources of the bank
holding company. Bank holding
companies are also subject to the
continuing Board supervision and
examination, including regular review of
their managerial resources. Accordingly,
there appears little regulatory purpose to
broadly interpreting the requirements of
section 914 to apply to all transactions
subject to section of the BHC A ct
The Itoarri believes that it is
appropriate to require notices of
changes in directors and senior
executive officers at bank holding
companies in a limited number of bank
holding company formations that are
exempt from the requirements of the
Change in Bank Control A c t I s certain
cases, a bank holding company
formation involves the first-time
acquisition
bank by a previously
unregulated company. In a limited
number of other cases, a group of
individuals who seek to acqsrire
of a bank
bank holding company may
choose
a new bank bolding
company to acquire Ike shares of the
institution rather than the individuals
acquiring tbe shares of the institution
directly. W ere tbe mcfividoais to acquire
control of the institution directly the
transaction would, m many mstances,
be subject to tbe provisions of the
Change in Bank Control Act. However.

3

3

of a

or
to foam

control

by choosing the bank holding company
form, the transaction becomes subject to
the provisions of the BHC Act and is
expressly exempt from the provisions of
the Change in Bank Control Act.
The Board believes that bank holding
company formations of these types that
involve an actual change in control and
management of a bank merit the same
type of review of subsequent changes in
directors and management of the
institution as would apply had the
individuals acquired the institution’s
shares directly. Accordingly, the Board
has applied the provisions of section 914
to changes in directors and senior
executive officers at bank holding
companies that were formed within two
years of the management change. The
regulation does not extend, however, to
bank holding companies that have been
established in a reorganization in which
substantially all of the shareholders of
the bank holding company were
shareholders of the bank prior to the
holding company’s fomation unless the
institution is undercapitalized, in
troubled condition, or otherwise subject
to section 914. Similarly, the regulation
does not extend to bank holding
companies that are formed as an
intermediate holding company that is
owned by a registered bank holding
company, unless the regulation is
otherwise applicable.
The Board does not require that
notices under section 914 be filed by
institutions involved in other
transactions that are exempt from the
notice requirements of the Change in
Bank Control Act under that Act or
under | 225.42 of the Board’s Regulation
Y. (12 U.S.C. 1817(j); 12 CFR 225.42.) In
this regard, the notice provisions of
section 914 do not apply to state
member banks or bank holding
companies that are acquired by another
previously registered bank holding
company in a transaction subject to
either the BHC Act or the Bank Merger
Act (12 U.S.C. 1828(c)), unless the
institution does not meet the appropriate
minimum capital adequacy standards, is
in troubled condition, or otherwise is
required to file a notice under this
section.

4. Procedures for Filing Notice and
Information Required in the Notice

The responsibility for filing a notice
under section 914 of FIRREA rests with
the institution seeking to add or employ
an individual as a director or senior
executive officer. Notices under this
section would be filed with the
appropriate Reserve Bank.
Section 914 provides that certain
information required under the Change
in Bank Control Act is required in




notices filed under this section. In
particular, section 914 of FIRREA
requires the following information
regarding a person who is the subject of
a notice: the identity, personal history,
business background, and experience of
the individual, including material
business activities and affiliations
during the past five years, a description
of any pending legal or administrative
proceedings in which the individual is a
party, and an explanation of any
criminal indictment or conviction
involving the individual. The regulation
adopts these information requirements.
Notices filed under this section may
take the form of a letter containing the
relevant information or the relevant
sections of the current form filed under
the Change in Bank Control Act. The
Board or Reserve Bank may modify
these requirements where appropriate,
and may request additional information
necessary to permit a full evaluation of
the competence, experience, character,
or integrity of the individual with
respect to whom the notice has been
filed, or of the public interest factors the
Board must consider.
Under the regulation, the 30-day time
period for System review of a notice
would not commence until the notificant
submits all the information required by
the statute and requested by the Board
or the Reserve Bank. The notificant will
be informed by the Reserve Bank in
writing once the notice is deemed to be
complete and is considered effective.
This letter from the Reserve Bank will
also state when the 30-day period has
begun as well as when the 30-day period
ends.
5.

Commencement of Service

Unless otherwise informed by the
Board or Reserve Bank, an individual for
whom a notice has been filed under this
section may begin the proposed service
as a member of the board of directors or
as a senior executive officer on the 31st
day following the date on which a
complete notice is given to the
appropriate Reserve Bank. Under the
Board’s regulation, an individual may
begin his or her proposed service at an
earlier date if the Board or the Reserve
Bank notifies the employing institution
in writing at an earlier date that the
System does not intend to object to the
proposed employment.
The Board has amended its Rules
Regarding Delegation of Authority to
permit the Reserve Banks to take all
actions necessary regarding a notice
filed under this subpart including
determining the informational
sufficiency of the notice, issuing letters
that the System does not intend to
object to a proposed appointment and
3

issuing notices of disapproval of a
proposed appointment.

6. Disapproval of a Notice and Appeals
The statute provides that an agency is
required to disapprove a notice if the
competence, experience, character, or
integrity of the individual with respect
to whom the notice is submitted
indicates that it would not be in the best
interest of the depositors of the bank or
in the best interest of the public to
permit the individual to be employed by,
or associated with, the bank or bank
holding company. These standards have
been adopted in the regulation.
The Reserve Bank or the Board will
inform the notificant in writing in the
event the Federal Reserve System
objects to the proposed service by an
individual for whom a notice has been
filed. The written notice of disapproval
will contain an explanation of the basis
for disapproval.
Under the regulation, the disapproved
individual, the state member bank or the
bank holding company notificant may
appeal the disapproval to the Board. The
appeal must be received by the Board
within 15 calendar days of the effective
date of the notice of disapproval. The
appeal must be made in writing and
must contain all facts, documents, find
arguments that the appealing party
wishes to be considered in the appeal.
The disapproved individual may not
serve as a director or senior executive
officer while the appeal is pending. The
Board will issue a written statement of
its final decision to the appealing party.
In connection with an appeal, the
Board may, in its sole discretion, order
an informal hearing if requested by the
disapproved individual or the notificant
and if the Board finds that oral argument
is appropriate or that a hearing is
necessary to resolve issues of material
fa c t Section 914 does not confer a
statutory right to a hearing. The Board
requests comment on whether, in light of
the court decisions in this area, a
disapproved individual would have any
constitutional right to a hearing in the
case of a disapproval under section 914.
[See, e.g., Feinberg v. FDIC, 420 F. Supp.
109 (D.C. 1976); Connelly v. Comptroller
of the Currency, 876 F.2d 1209 (5th Cir.
1989)).
7. Waiver Provisions
Sections 914 of FIRREA permits the
appropriate Federal banking agency to
waive the notice provisions of this
section in the event of extraordinary
circumstances. The Board’s regulation
allows the Board or the appropriate
Reserve Bank to waive the notice
provision if the delay associated with

prior notice would threaten the safety or
soundness of the state member bank or
bank holding company involved, or any
of the holding company’s subsidiary
banks. The notice requirements may
also be waived if delay would harm the
public interest or if extraordinary
circumstance* exist that justify a
waiver. If a waiver is granted, the
individuals subject to the waiver may
immediately assume responsibility as a
director or senior executive officer. As
provided by section 914. the regulation
states that waiver of the notice
provisions does not affect the Board's
authority to issue a subsequent notice of
disapproval within 30 days after the
waiver has been granted.

8. Interim Applicability

The provisions of section 914 of
FIRREA were made immediately
effective upon enactment of that Act on
August 9,1989. As a result, state
member banks and bank holding
companies are currently required by
statute to file notices with the Board
regarding proposed changes in directors
and senior executive officers. The Board
believes that it is in the public interest
to clarify immediately the scope of
section 914 and the procedures that
should be followed by state member
banks and bank holding companies.
Accordingly, the Board for good cause,
finds that these rules should be adopted
on an interim basis and that notice and
public comment prior to adoption of an
interim rule is impracticable and
contrary to the public interest under 5
USC 553(b)(B). The Board finds, for the
same reasons, that there is good cause
under 5 USC 553{d}{3] to make the
interim rule effective immediately
without regard to the 30-day period
provided m 5 USC 553fd). Accordingly,
the Board expects state member banks
and bank holding companies to follow
the procedures set out in the regulation,
subject to amendment after the close
the comment period.

of

Regulatory Flexibility Act
This rule implements specific
statutory requirements imposed by the
Financial Institutions Reform, Recovery,
and Enforcement Act of 1989. Section
914 of dial Act imposed specific prior
notice requirements on certain types of
banks and bank holding companies.
This prior notice requirement is
intended to permit the Federal banking
agencies to monitor changes in the
senior
board of
directors of banks and bark holding
companies that are undercapitalized, in
troubled condition, have been newly
chartered or have recently undergone a
change in control, in enacting this

management and




provision. Congress determined that the
burden that may be associated with the
notice requirement was outweighed by
the public benefits of review of senior
management at certain tanking
institutions. The required notice is of
short duration and should not
significantly disrupt the hiring and
appointment procedures of banks or
bank holding companies, including small
banking organizations. In order to
minimize the burden associated with
this regulation, the Board has adopted a
procedure that allows action prior the
expiration of the statutory notice
periods, and a provision for waiver of
the notice provisions in extraordinary
circumstances. The Board also expects
notificants to use existing forms, thereby
further minimizing any reporting burden.
Thus, the regulation is not expected to
have a significant economic impact on a
substantial number small business
entities within the meaning of the
Regulatory Flexibility Act (5 U.S.C. 001

Subpart H—Notice of Addition or
Change o f Directors And Senior
Executive Officers

PART 225—BANK HOLDING
COMPANIES AND CHANGE IM BANK
CONTROL

or bank holding company shall give the
Board 30 days’ written notice, as
specified in § 225.73. before adding or
replacing any member of the board of
directors or employing or changing the
responsibilities o f any individual to a
position as a senior executive officer of
the bank or bank hording company, if:
(1) The bank has been chartered less
than two years:

to

§ 225.71 Definitions.
(a)
means a
person who, without regard to title,
exercises the authority of one or more of
the following positions: chief executive
officer, chief operating officer, chief
financial officer, chief lending officer, or
chief investment officer. “Senior
executive officer” also indudes any
other person with significant influence
over major policymaking decisions of a
state member bank or bank holding
company.

Senior executive officer

(b) Bank or bank holding company in
troubled condition means any state

member bank or bank holding company
that:
(1) Has a composite rating, as
determined in the most recent report of
examination or inspection, of 4 or 5
under the commercial bank Uniform
Interagency Bank Rating System or
under the Federal Reserve bank holding
Paperwork Reduction Act
company rating system;
The regulation requires certain banks
(2] Is subject to a cease and desist
and bank holding companies to provide order or formal written agreement that
written notice to file Board prior to”
requires action to improve the financial
adding or replacing a director or senior
condition erf the institution, unless
executive officer. The Board intends to
otherwise Informed In writing by the
permit these organizations to use
Board or the appropriate Reserve Bank;
existing reporting forms in fulfilling this or,
requirement.
(3} Is expressly informed by the Board
or Reserve Bank that it is in troubled
List of Subjects im 12 C F R Part 225
condition for purposes of the
Administrative practice and
requirements of this subpart on the basis
procedure. Appraisals, Banks, Banking,
of the institution’s most recent
Federal Reserve System, Holding
examination, report of condition, or
companies, Reporting and recordkeeping inspection, or other information
requirements. Securities.
available to the Board.
For die reasons set forth in this notice, §225.72 Director and officer
the Board amends 12 CFR part 225 as
appointments; prior notice requirement.
follows:
(aj
A state member bank

of

et seq.).

Prior notice.

1. The authority citation for part 225 is
revised to read as follows:
A oAority 12 IT.S-.C. W17fl)(:F3|, 1015,1871 i.
1843fcJ{&* U44(bJ. 310* 710* 3007 and 300*

225J1

2. Subpart H. consisting of §$
through 225.73. is added to read as
follows:

or

Subpart H—Notice o f AcMRfon Change
of D irector* and Senior Executor* O fficers
Sec.

225.71 ^fin itio n s.
225.72 director and officer appointments;
prior notice lequirement.
225.73 Procedares for fifing, processing, and
acti- , on notices; standards for
disapproval; waiver of notice.

4

(2) Within the preceding two years,
bank or bank holding company has
undergone a change in control that
required a notice to be filed pursuant to
the Change to Bank Control Act or
subpart E of this pert
(3) Within the preceding two years,
the bank holding company became a
registered bank holding company, unless
the bank balding company is owned or
controlled by a registered bank holding
the

company, or the bank holding company
was established in a reorganization in
which substantially all of the
shareholders of the bank holding
company were shareholders of the bank
prior to the bank holding company’s
formation; or
(4)
The bank or bank holding
company is not in compliance with all
minimum capital requirements
applicable to the institution as
determined on the basis of the
institution’s most recent report of
condition, examination or inspection, or
is otherwise in troubled condition.
(b)
Advisory directors. (1J For
purposes of this subpart, except as
provided in paragraph (b)(2) of this
section, the term "member of the board,
of directors" does not include an
advisory director who:
(1) Is not elected by the shareholders
of the bank or bank holding company;
(ii) Is not authorized to vote on any
matters before the board of directors;
and
(iii) Provides solely general policy
advice to the board of directors.
(2) The Board or Reserve Bank may
otherwise determine that an advisory
director is in fact functioning as a
director or senior executive officer for
purposes of this subpart.

notice period specified in § 225.72 shall
begin on the date all required
information is received by the
appropriate Reserve Bank or die Board.
The Reserve Bank shall notify the bank
or bank holding company submitting the
notice of the date all such required
information is received and the notice is
accepted for processing, and of die date
on which the 30-day notice period will
expire.
(b) Commencement of service—(l) At
expiration of period. A proposed
director or senior executive officer may
begin service 30 days after a complete
notice under paragraph (a) of this
section has been accepted by the
Reserve Bank unless the Board or
Reserve Bank issues a notice of
disapproval of the proposed addition or
employment before the end of the 30day period.
(2)
Prior to expiration of period. A
proposed director or Senior executive
officer may begin service before the
expiration of the 30-day period if the
Board or the Reserve Bank notifies the
bank or bank holding company in
writing of the Board’s intention not to
disapprove the addition or employment.
(c) Notice of disapproval. The Board
or Reserve Bank must disapprove a
notice under S 225.72 if the Board or
§ 225.73 Procedures for filing, processing, Reserve Bank finds that the competence,
and acting on notices; standards for
experience, character, or integrity of the
disapproval; waiver o f notice.
individual with respect to whom the
notice is submitted indicates that it
(a)(1) Filing notice. The notice
would not be in the best interests of the
required in $ 225.72 shall be filed with
the appropriate Reserve Bank and shall depositors of the bank or in the best
interests of the public to permit the
contain the information required by
individual to be employed by, or
paragraph 6(A) of the Change in Bank
associated with, the bank or bank
Control Act (12 U.S.C. 1817(j)(6)(A)) or
prescribed in the designated Board form holding company. The notice of
disapproval shall contain a statement of
subject, in either case, to the authority
the basis for disapproval.
of the Reserve Bank or the Board to
(d) Appeal. (1) The disapproved
modify these requirements or require
individual or the state member bank or
additional information.
(2) Acceptance of notice. The 30-day bank holding company may appeal to




5

the Board the disapproval of a notice
under this subpart within 15 calendar
days of the effective date of the notice
of disapproval. An appeal shall be in
writing and explain the reasons for the
appeal and include all facts, documents,
and arguments that the appealing party
wishes to be considered in the appeal.
(2) The Board may, in its sole
discretion, order an informal hearing if
the hearing is requested in writing by
the disapproved individual or the
notificant at the time of an appeal, and
the Board finds that oral argument is
appropriate or that a hearing is
necessary to resolve disputes regarding
material issues of fact.
(3) The disapproved individual may
not serve as a director or senior
executive officer while the appeal is
pending. Written notice of the final
decision of the Board shall be sent to the
appealing party.
(e)(1) Waiver of notice. The Board or
the Reserve Bank may waive the prior
notice required under this subpart if it
finds th at
(1) Delay would threaten the safety or
soundness of the state member bank or
the bank holding company or any of its
bank subsidiaries;
(ii) Delay would not be in the public
interest or
(iii) Other extraordinary
circumstances exist that justify waiver
of prior notice.
(2) Effect on disapproval authority.
Any waiver issued by the Board or
Reserve Bank shall not affect the
authority of the Board or Reserve Bank
to issue a notice of disapproval within
30 days after such waiver.
By order of the Board of Governors of the
Federal Reserve System. February 13.1990.

William W. Wiles,

Secretary o f the Board.
[FR Doc. 90-4378 Filed 2-26-90; 8:45 am]
BIUJNQ CODE 6210-01-41