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#1443337 - 09/15/10 05:28 PM Credit card line assignment
M&M Offline
Platinum Poster
Joined: Nov 2003
Posts: 527
Midwest
Does your bank or do you know of anyone who assigns the credit line for credit cards based on where the customer is geographically located? Do you see fair lending risks with doing so?

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Lending Compliance
#1443643 - 09/15/10 10:22 PM Re: Credit card line assignment M&M
West Coast Comp Offline
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West Coast Comp
Joined: Jun 2010
Posts: 350
Lost in the rain.
We do not have such a program/practice and yes you at least have a fair lending risk.

That said if the geographic regions are broad enough (state by state vs. by zip code etc.) and supported by business reasons you might get away with it (not that I would want to have to defend the practice). It would be far better to base your decision on some borrower criteria (income, credit score, etc.) rather than geography.
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#1443672 - 09/16/10 01:27 AM Re: Credit card line assignment West Coast Comp
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
This reminds me of a fair lending assessment at a very large bank where I was employed a number of years ago. It said that the bank had data that showed that people who bought cars in the spring paid better than people who bought cars in the fall (less price sensitivity). However, the bank's decision was that they never wanted to stand in court and have to defend that position, data notwithstanding. Therefore, they would not differentiate based upon that documented data.
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