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Question & Answer
Question: What questions may we ask the obviously pregnant woman applicant. Does it make any difference if the applicant is a single mother?
Answer: The fundamental rule in Regulation B is that you may not ask gender based or marital status based questions. Asking a pregnant applicant whether she plans to continue working after the child is born is about as gender-based as it gets! The prohibitions stand, regardless of the applicant's marital status.
You may only ask questions that relate to the applicant's credit qualifications. Regulation B prohibits you from making assumptions because of the applicant's gender or marital status.
To test your questions, put the shoe on the other foot. For example, consider whether you would ask a single male applicant whether he plans to return to work after his child is born. Alternatively, would you ask a male applicant whether he has any potential liability for children or dependents outside of marriage?
Now, before we lose the loan officers completely, let's look at what we can ask and learn about the applicant. The credit decision must be based on the applicant's credit qualifications, not their gender or marital status. We can always look at the applicant's credit history. This tells us likelihood of future payments based on historic performance.
For example, an applicant with a responsible credit history is likely to remain responsible. An applicant with irresponsible credit and budget management problems is another matter. This second applicant would be denied not because she is pregnant but because she hasn't managed her finances adequately to support or justify the credit requested. You would (or should) reach the same conclusion for a single or married male applicant.
A second important piece of information would come with employment verifications. Without asking the applicant any illegal questions (questions you would not ask a male applicant) you will learn from the employer whether the applicant is an employee in good standing. If the verification is returned stating that the applicant is in a non-pay status, the door has been opened (legally) and you may inquire into the applicant's future employment. You would need to know, for example, how long the applicant will be in a non-pay status, when and how the applicant will return to pay status, and how payments will be made while in non-pay status. And you learned all this without asking any illegal questions!
Copyright © 1997 Compliance Action. Originally appeared in Compliance Action, Vol. 2, No. 5, 4/97
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