Reg B

I know that we can inquire about age/marital status under Reg B if the application is for a secured or joint application, but if the age/marital status is not collected, would this be a violation??

The purpose of Regulation B is to prevent discrimination on a prohibited basis in any aspect of a "credit" transaction.

Not collecting the age could be tricky to avoid age discrimination, even for a well-intentioned bank. How would you prove that you are lending to individuals of legal age to enter into an agreement? The regulation allows a bank to treat applicant age 62 and older more favorably than those age 61 and younger, but any other age difference is illegal. Reverse mortgage programs requires the borrower to be 62 or older. How would you prove that you were not discriminating based on age?

Marital status..I think would be the same. Proponents of the law believe divorced women were being treated particularly unfairly by lenders. How would you prove that you are not discriminating....

I would think that it is best to collect both. \

Then again, would the examiners prove it????

The data you collect in your loan underwriting is up to you, with only certain limitations. You may vary what is collected based on the loan terms, are you in a community property state, etc...

When you get into mortgages you'll have some requirements on the monitoring data.

What does your loan policy require and what risks do you accept for safety and soundness?

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

I agree with Kathy, but for partly different reasons. I'm not so worried about having age and MS data to prove I'm not discriminating. I'm more worried about having this information so I know what the bank's rights and remedies will be if the borrower defaults and I have to repossess collateral and/or sue the borrower. Lending to anyone under 18 without a co-signer is risky. Failing to determine MS when collateral is involved also puts my loan at undue risk.

Selectively requesting or not requesting can also be a problem. For example, if you only request marital status from female applicants and not male applicants, that can be a serious problem. If your policy is to collect, better make sure you ALWAYS collect.

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Opinions expressed are my own, and do not necessarily reflect those of my employer.

Good responses, everyone. Reg B doesn't specify whether you must ask information except for monitoring data collection. It does specify that you not use it to discriminate. That being said, I think that the most prudent course to follow is what most of the industry does. If you ever find yourself in a position where you have to defend what you did, you will be more vulnerable if what you are doing is different from the industry standard. If you don't collect age from applicants and most of the industry does, you will have some explaining to do if someone sues you for age discrimination. Let me stress that this is a consideration, not a rule.

The point about ask all customers the same thing is also critical to successful compliance. If you ever need to know a customer's age, you had better ask all customers the same question. Procedures and consistency are important in fair lending questions.

One of our concerns is asking for MS when the loan is secured by something other than real property. All of our applications provide a place for MS but use the phrase "joint or secured". Example: A lender gets MS on a loan to purchase a car since the loan is secured by that car, MS wasn't needed under Reg B, but is it considered "incorrect" if we did obtain it in this instance? Thank you.