On May 9, CFPB opinion on existing credit arrangement term changes.
CFPB issued advisory opinion on revoking/changing existing credit application terms.
Affirmed that the ECOA (15 USC 1691) and Regulation B (12 CFR 1002) protect not only those actively seeking credit but also those who sought and have received credit.
Backgound
ECOA protects individuals and businesses against discrimination in accessing and using credit; Fed tasked with creating rules to implement ECOA and did so through Reg B.
Reg B made clear that the new law’s protections against credit discrimination cover both those currently applying to receive credit and those who have already received it.
Rulemaking responsibility was shifted to CFPB after the enactment of Dodd-Frank act.
Credit Application Opinion
CFPB stated ECOA and Regulation B plainly protect applicants who have received credit and are existing account holders, not just those in the process of applying for credit.
The bureau is aware that some creditors fail to acknowledge that ECOA and Reg B apply to circumstances that take place after an extension of credit has been granted.
Including a revocation of credit or an unfavorable change in the terms of a credit arrangement; reminded that an applicant is a person who applied and received credit.
Bureau is also aware that some creditors fail to provide applicants with required notifications that include a statement of the specific reasons for adverse actions taken.
Effectiveness
Advisory opinion on application terms is applicable upon publication in federal register.
