CFPB Existing Credit Arrangements

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.

Regulators CFPB
Entity Types Bank; CU; MG Orig; Servicer; Thrift
Reference RF, 5/9/2022; Reg B; Citation: 12 CFR 1002; 15 USC 1691;
Functions Compliance; Financial; Legal; Operations; Risk
Countries United States of America
Products Banking; Loan
Regions Am
Rule Type Proposed
Rule Date 5/9/2022
Effective Date 5/9/2022
Rule Id 137693
Linked to N/A
Reg. Last Update 5/9/2022
Report Section US Banking

Last substantive update on 05/13/2022