Proposed Changes to Regulation B

Note: This list does not discuss the proposed changes to the regulation that are "housekeeping" types of changes without any intended change to the substance of the rule.

The definition of "Application" would be expanded to include written pre-approved offers of credit for a specific amount and specific period of time. This would bring in pre-solicited offers of credit within the definition of application.
Concerns about pre-solicited offers of credit have led the FRB to propose record retention requirements for the practice, using the "firm offer of credit" definition from the Fair Credit Reporting Act. The FRB believes that there may be some selection criteria may be based on prohibited characteristics.
The general rule prohibiting discrimination, ?202.4, would be enhanced to include related rules currently placed in other parts of the regulation or commentary.
A new section of the general rule, ?202.4, would institute a clear and conspicuous standard and a retainability standard for information. This addition anticipates rules the FRB expects to issue in other consumer protection regulations for electronic disclosures.
Information rules would be revised to permit collection of "monitoring data" - the race and gender of applicants. The FRB has been under pressure to permit data collection for all types of consumer loans, not merely mortgage loans. However, this proposal raises several serious concerns including the likely pressure from examiners and advocacy groups to require collection and the extreme sensitivity of asking for this information in the wake of the KYC privacy fiasco.
Language would be moved from the commentary into the regulation itself to strengthen the instruction that creditors must evaluate unmarried co-applicants in the same way as married co-applicants. This treatment has particular significance in the consideration of joint and individual debts, assets, and income.
A joint financial statement supporting an application for a business loan from an individual would not be evidence of intent to file a joint application. Many commercial lenders have relied on this type of financial statement to justify requesting the spouse's signature. Commenters should review the proposed guidance in the Commentary for the sort of indicators a lender could rely on to support additional signatures and discuss these with commercial lenders.
The effort to simplify the regulation could lead to more rules. The proposal would remove the exemption for notifying large businesses of their right to a written explanation of reasons for denial (thus requiring the notification).
Specificity requirements for adverse action reasons would be tightened to clarify that a general statement about the co-applicant's inadequate credit qualifications would not be a "specific" reason for denial.
Record retention rules would be expanded to include a 25 month retention period for commercial loans, and a three year retention period for information relating to presolicited applications.