I was wondering if anyone has any guidance on fair lending laws regarding a small creditor collecting on a past due loan. I know Reg B says we may not discriminate in the collection procedures. and I know that the Fair Debt Collections Procedures Act exempts lenders who collect their own debt as the definition of "debt collector". But I’m thinking specifically when a bank is working with a customer and we can’t treat customer A different than customer b.

But I’m thinking specifically when a bank is working with a customer and we can’t treat customer A different than customer b.

Would that not be the potential violation of Reg B that you already mentioned?

Yes, Reg B applies to the collection procedures because of Fair Lending regardless of not fitting the actual definition of a "debt collector" (regardless if the bank collects on their own debts).

I guess I'm not sure what your question is. What kind of further guidance are you looking for? Are you looking for what the prohibited bases are? Are you looking for guidance on what constitutes disparate impact in collections? Are you looking for resources?

You can't discriminate (i.e. "treat customer A different than customer b") based on "race, color, religion, national origin, sex, marital status, or age (provided that the applicant has the capacity 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 Credit Protection Act or any state law upon which an exemption has been granted by the Bureau" under Reg B.

I'm not actually sure if FHA applies to collections if it's a mortgage, but I wouldn't treat anyone differently based on Familial Status or Disability either.

I guess I was looking for a resource on best practices when it comes to collection actions by a lender which incorporates fair lending.