Proposed Changes to the Official Staff Commentary

For creditors offering presolicited credit applications, the commentary would specify that if the applicant requests a specific amount and the creditor offers a different amount, the creditor's offer is a counteroffer for purposes of notices.
The Board is proposing that the current, flexible definition of application, which is based on each creditor's practices, not be changed. Counseling and pre-qualification activities would continue to be subject to the definition if the counselor or creditor communicates a denial to the applicant.
The Board has concluded that it is not feasible to provide more detailed and specific guidance on when a creditor may be liable for the actions of another party that participates in the credit decision, such as a broker. Thus, the standard will continue to be "reasonable notice" of illegal practices. Creditors will need to maintain "some degree of diligence" in monitoring the actions of third parties in the credit decision process.
There would be changes to the commentary for ?202.4, the general rule prohibiting discrimination, to reflect changes being made to that section of the regulation. This clarifies the protections of the regulation that apply to "potential" applicants and to the pre-solicitation or screening activities of creditors.
Guidance on evaluating married and unmarried applicants would be moved into the regulation. The FRB is not proposing additional guidance in the commentary. This is the time to ask for additional guidance if you think it would be helpful to loan officers.
Signature issues are clearly high on the concern list. In addition to the rule changes to clarify that spousal signatures cannot be requested simply because of a joint financial statement, the Board would add to the commentary to ?202.7(d) a statement that a creditor may not require additional signatures if the applicant is individually qualified. This would provide additional support to the rule requiring individual credit for qualified applicants by clearly prohibiting products that are 'limited" to joint credit. In other words, there could be no such thing as a joint-only credit product.
The commentary to ?202.12, Record Retention, would be expanded to provide guidance on the new rules for retention of records pertaining to pre-screening activities and solicited applications.
Monitoring data problems seem to expand with each new delivery mechanism. In fact, monitoring data may soon be an anachronism. However, the FRB would add instructions for compliance with monitoring data for electronically received applications. If you are not in favor of expanding the data collection possibilities, use the problems encountered with collecting and reporting ECOA and HMDA data under this section as examples of why the information protections of ?202.5 should not be changed.
A new paragraph to ?202.15, the self-testing privilege, would explain that if a creditor elects to collect monitoring information on applicants for credit that is not subject to HMDA reporting, the information could not be treated as a self-test. In short, the information would not be subject to the self-test privilege and could be used or discovered by an examiner or an investigator.