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Student Loan Law: 34 C.F.R. § 668.16 Standards of administrative capability.

To begin and to continue to participate in any Title IV, HEA program, an institution shall demonstrate to the Secretary that the institution is capable of adequately administering that program under each of the standards established in this section. The Secretary considers an institution to have that administrative capability if the institution—

Student Loan Law: 34 C.F.R. § 668.18 Readmission requirements for servicemembers.

(a) General.

(1) An institution may not deny readmission to a person who is a member of, applies to be a member of, performs, has performed, applies to perform, or has an obligation to perform, service in the uniformed services on the basis of that membership, application for membership, performance of service, application for service, or obligation to perform service.

Student Loan Law: 34 C.F.R. § 668.19 Financial aid history.

(a) Before an institution may disburse title IV, HEA program funds to a student who previously attended another eligible institution, the institution must use information it obtains from the Secretary, through the National Student Loan Data System (NSLDS) or its successor system, to determine—

(1) Whether the student is in default on any title IV, HEA program loan;

Student Loan Law: 34 C.F.R. § 668.20 Limitations on remedial coursework that is eligible for Title IV, HEA program assistance.

(a) A noncredit or reduced credit remedial course is a course of study designed to increase the ability of a student to pursue a course of study leading to a certificate or degree.

(1) A noncredit remedial course is one for which no credit is given toward a certificate or degree; and

(2) A reduced credit remedial course is one for which reduced credit is given toward a certificate or degree.

Student Loan Law: 34 C.F.R. § 668.21 Treatment of title IV grant and loan funds if the recipient does not begin attendance at the institution.

(a) If a student does not begin attendance in a payment period or period of enrollment—

(1) The institution must return all title IV, HEA program funds that were credited to the student’s account at the institution or disbursed directly to the student for that payment period or period of enrollment, for Federal Perkins Loan, FSEOG, TEACH Grant, Federal Pell Grant, ACG, and National SMART Grant program funds; and

Student Loan Law: 34 C.F.R. § 668.22 Treatment of Title IV funds when a student withdraws.

(a) General.

(1) When a recipient of title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of title IV grant or loan assistance that the student earned as of the student’s withdrawal date in accordance with paragraph (e) of this section.

Credit Discrimination: 2.5 Scope of State Credit Discrimination Statutes

By and large, the scope of state credit discrimination statutes follows the scope of the federal statute they are modeled after. Nevertheless, sometimes the scope of a state statute will be broader than the scope of the analogous federal statute, and it may prove particularly valuable in those situations.

Credit Discrimination: 2.6 Scope of State UDAP Statutes

Occasionally, a state statute generally prohibiting unfair or deceptive acts or practices (a UDAP statute) may be used to challenge credit discrimination not prohibited by any other statute, or a UDAP claim may be useful if a discrimination statute does not provide a sufficient remedy.332 Nevertheless, various scope issues may limit the applicability of a state UDAP statute to credit discrimination.

Credit Discrimination: 2.7 Summary of Key ECOA and FHA Provisions

An advocate will often have to choose whether to bring claims under the Equal Credit Opportunity Act (ECOA) or the Fair Housing Act (FHA). Claims under both laws are not viable in some cases because of a provision in the ECOA that no person aggrieved by an ECOA violation and, in the same transaction, by a violation of the FHA’s prohibitions concerning residential real estate-related discrimination can recover under both the ECOA and the FHA.342

Key advantages and disadvantages of each law are discussed below:

Credit Discrimination: 7.1 Introduction and History of Redlining

Redlining refers to the practice of separating out certain neighborhoods for disparate treatment as to mortgage or other types of lending. Redlining began as a result of the policies of the Home Owners’ Loan Corporation (HOLC) in the 1930s. The HOLC was created to help families prevent the loss of homes through foreclosure.1

Credit Discrimination: 7.2.1 The ECOA, FHA, and Federal Civil Rights Acts

To the extent redlining is based on a desire to avoid making loans to certain ethnic or racial groups—or loans in areas where such groups predominate—the practice involves disparate treatment on a prohibited basis in clear violation of credit discrimination statutes.11 Precedent has developed over the years allowing plaintiffs to use the Fair Housing Act (FHA) to challenge such redlining practices.12 The Equal Credit Opportunity Act (ECOA) and civil rights statutes may also be used to challenge redl

Credit Discrimination: 7.2.2 Government Enforcement Actions

Government enforcement actions have focused on alleged illegal redlining or discriminatory marketing practices.26 Most of the government enforcement actions were filed with simultaneous settlement agreements or consent decrees. Although these cases have no direct precedential value, they are important models for public and private fair lending cases.

Credit Discrimination: 7.3.1 Overview

Insurance redlining is the practice of “charging higher rates or declining to write insurance for people who live in particular areas (figuratively, sometimes literally, enclosed with a red line on a map).”90 The definition is usually expanded to include discrimination against individuals on the basis of a factor unrelated to risk in providing residential property and casualty insurance.

Credit Discrimination: 7.3.2 The Impact of Insurance Redlining

Insurance redlining seriously undermines the ability of affected individuals to purchase and safeguard their homes. According to one court: “[T]he availability of housing is . . . dependent on the availability of insurance. It is elementary that without insurance, mortgage financing will be unavailable, because a mortgage lender simply will not lend money on the [uninsured] property.

Credit Discrimination: 7.3.3 Detecting Insurance Redlining

Insurance redlining, like other forms of discrimination, occurs in overt, as well as subtle, ways. Listed below are a few ways to detect unlawful insurance discrimination practices:

Application Criteria: Suspicious signs include applications that require, for example, information on the age or value of a dwelling, prior insurance history (some insurers will not accept customers who have been turned down by other insurance companies), credit rating, or property inspections only in certain neighborhoods.

Credit Discrimination: 7.3.4.1 The ECOA

The official interpretations of Regulation B explicitly state that it is not a violation of Regulation B for a creditor to obtain and use information about an applicant’s age, sex, or marital status for the purpose of determining insurance eligibility and premium rates, although not for the credit decision itself.111 Still, the Equal Credit Opportunity Act (ECOA) may be applicable when credit has been denied or some other adverse action was taken because the applicant refused to purchase insurance.

Credit Discrimination: 7.3.4.2.1 The FHA applies to insurance

The federal Fair Housing Act (FHA) is another important option, particularly with respect to the sale of insurance related to a dwelling, such as homeowners insurance.113 Throughout the 1980s, there was a split among the circuit courts regarding FHA applicability to insurance.114 The tide began to turn in 1989 when the Department of Housing and Urban Development (HUD) enacted a regulation prohibiting discriminatory refusals to provide “property or hazard insurance for dwellings” or providing ins

Credit Discrimination: 7.3.4.2.2 Preemption and the McCarran-Ferguson Act

Assuming the court agrees with the majority view that the FHA applies, the court must still determine whether the McCarran-Ferguson Act137 prevents the FHA from applying to the sale of insurance.138 The McCarran-Ferguson Act prohibits federal statutes from invalidating, superseding, or impairing a state law regulating insurance unless the federal statute specifically relates to the business of insurance.

Credit Discrimination: 7.3.4.3 The Federal Civil Rights Acts

The federal Civil Rights Acts should apply to discrimination in the sale of any form of insurance, because insurance is a contract.150 While the McCarran-Ferguson Act prevents federal statutes from invalidating state laws that regulate insurance unless the federal statute specifically relates to insurance, preemption of the federal regulation of insurance here is unlikely.151 Similar to their analysis under the FHA, the courts have almost unanimously found that the Civil Rights Acts are applicab

Credit Discrimination: 7.3.4.4 State Laws

In addition to federal laws and regulations, the majority of states have some form of general discrimination laws or unfair insurance practices (UNIP) statute (also known as unfair trade practices acts or UTPA), under which insurance discrimination claims may be brought.

Credit Discrimination: 11.2.1 Direct Creditor Liability

Creditors that directly extend or refuse to extend credit, as well as persons who regularly arrange for the extension, renewal, or continuation of credit, are almost always covered by the credit discrimination laws.2 There are only a few exceptions. For example, the Equal Credit Opportunity Act (ECOA) and Fair Housing Act (FHA) do not apply to an individual creditor who only makes one or two isolated loans.3 The FHA is further limited to credit discrimination related to a dwelling.

Credit Discrimination: 11.2.2.1 General

Liability under both the ECOA and the FHA may stretch well beyond the direct creditors who extend or deny credit. This liability is critical because financial players other than the direct creditors often have the deepest pockets.