Loan questions

Marketing would like to do a promotion for Green Loan Products. If the customer purchases a hybrid vehicle or purchases solar panels for their home they would like to give the borrower a xx% discount in their rate. We currently give a % rate discount for auto deduct from a checking account. I was trying to find any information that this would not be allowed by Reg Z.

Reg Z just states what must be disclosed to the borrower. The bigger question is weather the practice is discriminatory under Reg B, which it isn't. Being non-energy conscious is not a protected class.

That being said, as with any special loan program you should evaluate it for any potential indicators of disparate impact. (For example if these products cost more than their traditional oil dependent counterparts, will minority borrowers be less likely to qualify resulting in white borrowers paying lower rates.)