In a recent audit, we were cited for not providing the Federal Equal Credit Opportunity Act (ECOA) disclosure on several originated loans. This has never come up before, even with our secondary market investors, so I'm trying to determine if we are providing it on some other document (i.e. 1003).

I know ECOA verbiage is required for adverse loans, but what ECOA disclosure (besides the right to appraisal notice) is required for originations?

what ECOA disclosure (besides the right to appraisal notice) is required for originations?


The answer is none. Ask the auditor for their citation.

I hate seeing that ECOA disclosure that says the bank will not discriminate in loan packages; it has to be something that some vendor or investor cooked up and started a trend years ago.

I agree, ask for a citation of the requirement. There is none.

Mel, is there anything in state law? I believe that a few states have non-discrimination notice requirement language.

Yes, there are some state disclosure requirements out there, but his audit said the "federal" notice. ????

Agree, but if Washington law is more restrictive, it supersedes, and trying to look at it as an "inclusive' non-discrimination document, piggybacking on ECOA's name.

My point was just that they were written up for a non-existent federal disclosure, not for a state disclosure. Any of the state disclosures I have seen have the state name somewhere in the document and have slightly different nuances.

Regardless, the auditors should not cite an error without a citation.

UPDATE: I've done some research and found out this is required for brokers, not banks. I will be responding to the auditor.

I'm trying to find the broker requirement to provide this disclosure mentioned by Mel in WA. We act as a broker to a secondary market lender, but we also do in-house mortgages. The secondary market lender isn't requiring us to provide this disclosure.

Is there something in Reg B specific to brokers that would require this disclosure at application or within 3 days of app? I'm not finding anything.

There is nothing in Reg B for such a notice.