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Credit Discrimination: 2(n) Multifamily Dwelling.

1. Multifamily residential structures. The definition of dwelling in § 1003.2(f) includes multifamily residential structures and the corresponding commentary provides guidance on when such residential structures are included in that definition. See comments 2(f)–2 through -5.

Credit Discrimination: 2(o) Open-End Line of Credit.

1. General. Section 1003.2(o) defines an open-end line of credit as an extension of credit that is secured by a lien on a dwelling and that is an open-end credit plan as defined in Regulation Z, 12 CFR 1026.2(a)(20), but without regard to whether the credit is consumer credit, as defined in § 1026.2(a)(12), is extended by a creditor, as defined in § 1026.2(a)(17), or is extended to a consumer, as defined in § 1026.2(a)(11).

Credit Discrimination: 2(p) Refinancing.

1. General. Section 1003.2(p) defines a refinancing as a closed-end mortgage loan or an open-end line of credit in which a new, dwelling-secured debt obligation satisfies and replaces an existing, dwelling-secured debt obligation by the same borrower. Except as described in comment 2(p)–2, whether a refinancing has occurred is determined by reference to whether, based on the parties’ contract and applicable law, the original debt obligation has been satisfied or replaced by a new debt obligation. Whether the original lien is satisfied is irrelevant.

Credit Discrimination: 4(a) Data Format and Itemization

1. General. Except as otherwise provided in § 1003.3, § 1003.4(a) describes a financial institution’s obligation to collect data on applications it received, on covered loans that it originated, and on covered loans that it purchased during the calendar year covered by the loan/application register.

i. A financial institution reports these data even if the covered loans were subsequently sold by the institution.

Credit Discrimination: 4(f) Quarterly Recording of Data.

1. General. Section 1003.4(f) requires a financial institution to record the data collected pursuant to § 1003.4 on a loan/application register within 30 calendar days after the end of the calendar quarter in which final action is taken. Section 1003.4(f) does not require a financial institution to record data on a single loan/application register on a quarterly basis.

Credit Discrimination: 5(a) Reporting to Agency.

1. Quarterly reporting—coverage. i. Section 1003.5(a)(1)(ii) requires that, within 60 calendar days after the end of each calendar quarter except the fourth quarter, a financial institution that reported for the preceding calendar year at least 60,000 covered loans and applications, combined, excluding purchased covered loans, must submit its loan/application register containing all data required to be recorded for that quarter pursuant to § 1003.4(f).

Credit Discrimination: 5(b) Disclosure Statement.

1. Business day. For purposes of § 1003.5(b), a business day is any calendar day other than a Saturday, Sunday, or legal public holiday.

2. Format of notice. A financial institution may make the written notice required under § 1003.5(b)(2) available in paper or electronic form.

3. Notice—suggested text. A financial institution may use any text that meets the requirements of § 1003.5(b)(2). The following language is suggested but is not required:

Credit Discrimination: 5(c) Modified loan/application Register.

1. Format of notice. A financial institution may make the written notice required under § 1003.5(c)(1) available in paper or electronic form.

2. Notice—suggested text. A financial institution may use any text that meets the requirements of § 1003.5(c)(1). The following language is suggested but is not required:

Home Mortgage Disclosure Act Notice

Credit Discrimination: 5(e) Posted Notice of Availability of Data.

1. Posted notice—suggested text. A financial institution may post any text that meets the requirements of § 1003.5(e). The Bureau or other appropriate Federal agency for a financial institution may provide a notice that the institution can post to inform the public of the availability of its HMDA data, or an institution may create its own notice. The following language is suggested but is not required:

Home Mortgage Disclosure Act Notice

Credit Discrimination: 6(b) Bona Fide Errors.

1. Information from third parties. Section 1003.6(b) provides that an error in compiling or recording data for a covered loan or application is not a violation of the Act or this part if the error was unintentional and occurred despite the maintenance of procedures reasonably adapted to avoid such an error. A financial institution that obtains the required data, such as property-location information, from third parties is responsible for ensuring that the information reported pursuant to § 1003.5 is correct.

Credit Discrimination: Amendment History

[77 Fed. Reg. 8722 (Feb. 15, 2012); 77 Fed. Reg. 76,839 (Dec. 31, 2012); 78 Fed. Reg. 79,286 (Dec. 30, 2013); 79 Fed. Reg. 77,854 (Dec. 29, 2014); 80 Fed. Reg. 66, 317, 66,339 (Oct. 28, 2015); 81 Fed. Reg. 93,581 (Dec. 21, 2016); 82 Fed. Reg. 43,136, 43,145, 43,146,(Sept. 13, 2017); 82 Fed. Reg. 61,146 (Dec. 27, 2017); 84 Fed. Reg. 514 (Jan. 31, 2019); 84 Fed. Reg. 57,981, 58,003 (Oct. 29, 2019); 84 Fed. Reg. 69,994 (Dec. 20, 2019); 85 Fed. Reg. 28,404, 28,406 (May 12, 2020); 85 Fed. Reg. 83,410 (Dec. 22, 2020); 86 Fed. Reg. 72,819 (Dec. 23, 2021)]

Credit Discrimination: 3.1 Introduction

Federal and state credit discrimination laws do not prohibit all forms of discrimination. They do not prevent creditors from making reasonable distinctions between applicants, denying credit, or offering less advantageous terms to higher-risk borrowers. The credit discrimination laws generally do not even require that creditors act reasonably in making a determination as to which applicants are high risk.

Credit Discrimination: 3.2 When Is Discrimination Made on a Prohibited Basis?

Creditors are in the business of distinguishing between good and bad credit risks and creditors discriminate against bad risks all the time. Credit discrimination laws do not generally prevent creditors from denying credit or providing less favorable terms to bad credit risks. In fact, such laws do not generally prevent creditors from making bad judgments and denying credit to good credit risks. What credit discrimination laws do is outlaw the practice of treating individuals differently because of their race, religion, national origin, sex, or some other prohibited basis.

Credit Discrimination: 3.3.1 Race and Color

Race and color are prohibited bases under both the Equal Credit Opportunity Act (ECOA)5 and the Fair Housing Act (FHA).6 They are also prohibited bases under the federal Civil Rights Acts7 and virtually all state credit discrimination legislation.8 American Indians are a protected race.9 For example, one settled lawsuit alleged that a lender violated the

Credit Discrimination: 3.3.2 Religion, Creed, and Political Affiliation

Religion is a prohibited basis for discrimination under the ECOA,13 the federal FHA,14 and most state credit discrimination statutes.15 The only exception under the ECOA is that creditors may favor applicants of a particular religion when offering a special-purpose credit program meeting the standards set out in Regulation B.16

Credit Discrimination: 3.3.3.2 Ancestry or Country of Birth

National origin is not defined in U.S. Department of Housing and Urban Development (HUD) regulations but has been the subject of some interpretation under the ECOA. It seems clear that national origin is included as a prohibited basis to prevent discrimination based on an individual’s ancestry.

Credit Discrimination: 3.3.3.4.1 Discrimination against immigrants

Credit discrimination against immigrants occurs frequently and often overtly, especially in mortgage lending.35 Non-citizens who are not lawful permanent residents generally may be subject to heightened requirements to obtain mortgage loans, such as higher down payments and additional documentation requirements.36 They may be unable to obtain loans that conform to secondary market requirements and may be required to pay higher interest rates.37

Credit Discrimination: 3.3.3.4.3 The Fair Housing Act standard

The Fair Housing Act (FHA) is not clear as to whether its prohibition on discrimination based on national origin would apply to discrimination based on immigration status.45 Unlike the ECOA, there is no explicit exception allowing distinctions based on immigration status. Therefore, a discrimination action based on immigration status could conceivably be available under the Act.

Credit Discrimination: 3.3.4.1 General

An applicant’s sex is a prohibited basis for credit discrimination under the ECOA,47 the federal FHA,48 and many state credit discrimination statutes.49 Sex discrimination is often related to discrimination based on marital status, discussed infra.50 It is therefore important to consider both bases in any case involving one or the other.

Credit Discrimination: 3.3.4.2 Special ECOA Protections

The ECOA provides women with specific protections against creditor inquiries or credit decisions based on a woman’s childbearing or childrearing intentions, including plans for maternity leave.51 For example, a civil penalty was assessed against a credit union that denied loans to women members who anticipated taking maternity leave.52 Similarly, the FHA prohibits discrimination on the basis of familial status, which includes discrimination against women who are pregnant.

Credit Discrimination: 3.3.4.3 Sexual Orientation

In light of the Supreme Court’s landmark decision in Obergefell v. Hodges,58 which granted same-sex couples the fundamental right to marry, questions of discrimination on the basis of sexual orientation take on two forms. The first concerns discrimination based on an individual’s sexual orientation, and the second involves treating same-sex married couples differently than opposite-sex married couples.