What are Reg B requirements?
Regulation B requires that banks provide a copy of the appraisal report used in connection with an application for credit to be secured by a lien on a dwelling. A bank may provide the copy either routinely (whether or not credit is granted or the application is withdrawn) or upon an applicant’s written request.
What is covered in Reg B?
The regulation covers topics such as:
Appraisal and other written valuations. Special purpose credit programs. Limitation on collection certain protected information. Self-testing and self-correction.
What are the Nine prohibited basis for regulation B?
prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, because an applicant receives income from a public assistance program, or because an applicant has in good faith exercised any right under the Consumer Credit Protection …
Who does Reg B apply to?
Regulation B applies to all persons who, in the ordinary course of business, regularly participate in the credit decision, including setting the terms of the credit. The term “creditor” includes a creditor’s assignee, transferee, or subrogee who so participates.
Does Reg B apply to credit cards?
The Equal Credit Opportunity Act and Regulation B apply to all credit–commercial as well as personal-without regard to the nature or type of the credit or the creditor, except for an entity excluded from coverage of this part (but not the Act) by section 1029 of the Consumer Financial Protection Act of 2010 (12 U.S.C.
What are ECOA requirements?
The ECOA Valuations Rule requires creditors to disclose to applicants that they have the right to receive copies of appraisals and written valuations.
Does Reg B apply to deposit accounts?
ECOA/Reg B – Consumer Notices (Applications for Credit with or without a consumer report and Deposit Accounts with credit features where a consumer report is used). ECOA/Reg B does not apply to applications for deposit accounts where there is no credit feature.
What are the 3 types of lending discrimination?
There are 3 types of discrimination in fair lending:
- Overt Discrimination. Overt discrimination is the act of openly and/or intentionally discriminating on a prohibited basis, i.e. “we don’t lend to single women.”
- Disparate Treatment.
- Disparate Impact.
Are credit cards covered by Reg B?
If a transaction provides for the deferral of the payment of a debt, it is credit covered by Regulation B even though it may not be a credit transaction covered by Regulation Z (Truth in Lending) (12 CFR part 1026).
Does Reg B apply to all commercial loans?
What is an ECOA violation?
ECOA makes it illegal for lenders to discriminate based on race, color, religion, national origin, sex, marital status, age, the receipt of public assistance, and the applicant’s exercise of specific consumer protection laws.
What are the three main fair lending regulations?
The courts have recognized three methods of proof of lending discrimination under the ECOA and the FHAct: Overt evidence of disparate treatment; • Comparative evidence of disparate treatment; and • Evidence of disparate impact.
What are unfair lending practices?
Predatory lending practices, broadly defined, are the fraudulent, deceptive, and unfair tactics some people use to dupe us into mortgage loans that we can’t afford. Burdened with high mortgage debts, the victims of predatory lending can’t spare the money to keep their houses in good repair.
What is the most common Reg B violation?
Common Violation #1: Discrimination on a prohibited basis in a credit transaction.
What is the difference between ECOA and Regulation B?
Regulation B of the Equal Credit Opportunity Act (ECOA) describes lending acts and practices that are specifically prohibited, permitted, or required. for fair lending practices.
What are two primary fair lending laws?
The federal fair lending laws—the Equal Credit Opportunity Act and the Fair Housing Act—prohibit discrimination in credit transactions, including transactions related to residential real estate.
What are the 4 C’s of credit?
Standards may differ from lender to lender, but there are four core components — the four C’s — that lender will evaluate in determining whether they will make a loan: capacity, capital, collateral and credit.
What are the 3 main fair lending laws and regulations?
What are the 3 types of credit risk?
Types of Credit Risk
- Credit default risk. Credit default risk occurs when the borrower is unable to pay the loan obligation in full or when the borrower is already 90 days past the due date of the loan repayment.
- Concentration risk.
- Probability of Default (POD)
- Loss Given Default (LGD)
- Exposure at Default (EAD)
What are the 5 components of credit score?
The 5 Factors that Make Up Your Credit Score
- Payment History. Weight: 35% Payment history defines how consistently you’ve made your payments on time.
- Amounts You Owe. Weight: 30%
- Length of Your Credit History. Weight: 15%
- New Credit You Apply For. Weight: 10%
- Types of Credit You Use. Weight: 10%
What are violations of fair lending?
The federal Fair Housing Act makes it unlawful to discriminate in the sale, rental, or financing of homes because of race, color, national origin, religion, sex, familial status, or disability.
What is 5 C’s credit?
What are the 5 Cs of credit? Lenders score your loan application by these 5 Cs—Capacity, Capital, Collateral, Conditions and Character. Learn what they are so you can improve your eligibility when you present yourself to lenders.
What is the formula for credit risk?
To sum up, the expected loss is calculated as follows: EL = PD × LGD × EAD = PD × (1 − RR) × EAD, where : PD = probability of default LGD = loss given default EAD = exposure at default RR = recovery rate (RR = 1 − LGD).
What are the four C of credit?
What is the most important credit score?
Your Credit Score Is The Most Important Score You Should Know
- Payment History – this is the most important and accounts for 35% of your FICO 8 Score.
- Credit Usage – the amount of credit you are using accounts for 30% of your credit score.
- Length of Credit History – A long credit history accounts for 15% of your Score.