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The Consumer Financial Protection Bureau (CFPB) Posted a advisory opinion on May 9, confirming that for the purposes of the Equal Credit Opportunity Act (“ECOA”) and its implementing regulations, Regulation B, the intended scope of provisions prohibiting discrimination based on race, color, religion, national origin, sex, marital status and age should cover not only applicants for credit, but also customers who have already obtained credit.
The CFPB states that this advisory opinion “is an interpretative rule issued under the authority of the Bureau to interpret the ECOA and Regulation B”, which means that the opinion is to be considered regulatory guidance and is not not subject to public comment or rule-making procedures. Learn more about the CFPB’s advisory opinion process here.
This advisory opinion was deemed necessary by the CFPB because some district court opinions have limited the meaning of “plaintiffs” in the ECOA and Regulation B to those who have not yet received credit. When the definition of “applicant” is limited in this way, creditors could revoke or modify existing credit extensions (such as credit card maximum credit limits) without having to comply with ECOA and Regulation B , which would require the creditor to send a statement of the reasons for the action taken (or a notice describing how to receive a statement of the reasons), thus allowing the borrower to assess whether there was an error and what steps the borrower may need to take to preserve available credit in the future. This advisory opinion is consistent with positions taken by the Federal Reserve since 1976, when the ECOA became law.
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