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GMI On Unsecured Consumer Loans: Reg B

Answered by: 
David A. Dickinson

Question: 
My question is that our compliance department is asking operations to gather GMI on all unsecured consumer loans that are currently on our books. The purpose is to run comparisons for fair lending. I have researched this and find that it is not allowable under Reg B, however the argument is that these are already our loans and we are not asking the borrower for it up front to make a lending decision. I would appreciate your opinion.
Answer: 

ยง1002.5(b) states:
Limitation on information about race, color, religion, national origin, or sex. A creditor shall not inquire about the race, color, religion, national origin, or sex of an applicant or any other person in connection with a credit transaction, except as provided in paragraphs (b)(1) and (b)(2) of this section.

It doesn't matter that the loan is closed, this section prohibits you from inquiring about GMI. There are a few exceptions (self-testing and how to title the person).

First published on 12/04/2016

Filed under: 
Compliance
Filed under compliance as: 
Reg. B
GMI

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