Reg B - Lending to Persons with Disabilities

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Question:

I am on the board of a non-profit housing program. During our family selection process we ask if they or any dependents have a disability. According to Reg B section 202.8 we are allowed to do that if it is part of the selection process (we receive monies from the Lions who require it to be used for a person with a disability) but we also provide housing for those who are not disabled. Would it be prudent to have two separate application processes? One for those who would like to apply for the house using Lions money which requires a disability and one that is open to others without regard to disabilities? If you were wondering, yes, we are subject to Reg B because we carry the mortgages on the home, hence we provide credit.

Answer:

You are subject to Reg B simply by virtue of participating in the credit decision. You don't have to be the one actually extending the funds to be covered.

When you are participating in a program under 202.8, it is a best practice to have separate application procedures. This does not require separate forms; merely that you clarify up front with the customer which program they are using.

First published on BankersOnline.com 5/29/06