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#4210 - 08/30/01 07:21 PM reg b
Melanie Offline
New Poster
Joined: Jun 2002
Posts: 1
we are considering an interest rate discount for customers that belong to our senior club. the age for the club is age 50. would an offer of this type be a violation of the ECOA or Fair Lending?

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General Discussion
#4211 - 08/30/01 07:34 PM Re: reg b
Mom of Boys Offline
Mom of Boys
Joined: Aug 2001
Posts: 54
The Commentary to Regulation B 202.6(b)(2) states: Any system of evaluating creditworthiness may favor a credit applicant who is age 62 or older. A credit program that offers more favorable credit terms to applicants age 62 or older is also permissible; a program that offers more favorable credit terms to applicants at an age lower than 62 is permissible only if it meets the special-purpose credit requirements of section 202.8.

Opinions are my own not my employer.

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#4212 - 08/31/01 06:16 PM Re: reg b
Princess Romeo Offline

Power Poster
Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
What you described is the CLASSIC example of a Reg B violation for age discrimination - and one that is somewhat inadvertent for banks.

If you want to establish such a program - you will still have to limit to the discount to anyone age 62 and over. You can still require that they be a member of the Senior Club, but they must also be at least 62 years old.

Regulations are a poor substitute for ethics.
Just sayin'

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#4213 - 09/09/01 05:24 PM Re: reg b
Lucy Griffin Offline

Diamond Poster
Lucy Griffin
Joined: Nov 2000
Posts: 1,544
The type of program described is the most common substantive violation of Regulation B that examiners have found. While the Department of Justice was giving their attention to race discrimination in mortgage lending, examiners kept finding the problem you describe. Don't go there. The legal age, so to speak, is 62 and nothing else!

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#4214 - 09/09/01 08:44 PM Re: reg b
Richard Insley Offline
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,007
Toano, VA
If you're a marketeer or a member of your bank's sales force, you should ask your compliance officer to conduct some basic compliance training. A good foundation in the consumer regs will help you avoid dead ends that waste time without producing any loans.
...gone fishing.

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