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Loan Declined Due to Customer Filing Bankruptcy

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Question: 
If a bank declines a loan application because the applicant has exercised his right to file for bankruptcy would this be considered a violation of Reg B?
Answer: 

No. Reg B prohibits discrimination on the basis of good faith exercise of rights under the Consumer Credit Protection Act. This is a very specific set of statutes that includes things like Truth in Lending, Fair Debt Collection Practices and such. It does not incorporate bankruptcy statutes. For a complete listing of the sections of the Consumer Credit Protection Act, click here.

First published on BankersOnline.com 7/03/06

First published on 07/03/2006

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