How Senior Is Senior?

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Question:

I have a question about the age on senior accounts. Is there a regulation or something that says that a senior account should be at age 55 or can the bank set their own age?

Answer:

If the senior accounts are purely deposit accounts, with no credit feature of any kind associated with them, the age for qualification as a "senior" can be set by the institution.

If any facet of the senior account, or benefit of the senior account, relates to credit, however, the age discrimination prohibitions of ECOA and Regulation B come into play.

Reg B says "In any system of evaluating creditworthiness, a creditor may consider the age of an elderly applicant when such age is used to favor the elderly applicant in extending credit." But the term "elderly" under that Reg is defined to mean "age 62 or older", so if you had a special senior account, with a credit feature, designed to favor the elderly applicant, the requisite age to qualify would need to be 62 or higher.

First published on BankersOnline.com 10/1/01