Amendments being proposed to the Equal Credit Opportunity Act and its implementing rule are intended to provide greater clarity for lenders.
The ECOA is a federal civil rights law that is designed to prevent discrimination by providers of consumer credit, including residential lenders.
Regulation B, which is the rule that implements the ECOA,
restricts questions about a consumer’s race, color, religion, national origin and sex.
But in some circumstances, lenders can ask about these characteristics. This includes required collection of the information for some mortgage applications.
On Friday, the Consumer Financial Protection Bureau said it it proposing amendments to ECOA regulations that would
provide additional flexibility for mortgage lenders in the collection of consumer ethnicity and race information.
The proposal would have lenders maintaining the same practices regardless of their loan volume or other characteristics. This would enable more lenders to adopt forms like the
Uniform Residential Loan Application that include expanded requests for information regarding a consumer’s ethnicity and race.
According to the bureau, its proposal
would provide compliance flexibility for individual home lenders and support the broader mortgage industry’s ability to use consistent forms and compliance practices.
“The CFPB believes the proposed amendments will provide greater clarity to lenders regarding their obligations under the law, while promoting compliance with rules intended to ensure consumers are treated fairly,”
the notice stated.
A separate proposal was issued for amendments to Regulation B.
The full ECOA proposal in online at .
The full Regulation B proposal in online at:
www.consumerfinance.gov/policy-compliance/rulemaking/rules-under-development/amendments-equal-credit-opportunity-act-regulation-b-ethnicity-and-race-information-collection/
