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LEXSTAT 9-171 BANKING LAW § 171.02
Banking Law
Copyright 2009, Matthew Bender & Company, Inc., a member of the LexisNexis Group.
CHAPTER 171 Application Process
9-171 Banking Law § 171.02
§ 171.02 Introduction
Consumer credit application process subject to federal statutes and rules and state statutes; objectives of rules
and statutes are to insure full disclosure of credit terms, prevent credit application discouragement of protected classes, and prevent eliciting of information to be used for discriminatory purposes; Truth in Lending,
Fair Credit Reporting, Equal Credit Opportunity, and Fair Housing Acts apply to consumer credit application
process
The consumer credit application process is subject to several federal statutes and federal regulatory agency
rules and regulations. In addition, state and local statutes afford protection to consumers against discriminatory application procedures.n1 Federal regulations affecting the consumer credit application process have one
of three principal objectives:
(1) to assure the timely, full and accurate disclosure of credit terms, and the costs associated
with the credit transaction;
(2) to prevent the discouragement of credit applications made by protected classes of citizens;
and
(3) to prevent the eliciting of information from an applicant that is not relevant to his creditworthiness, and may be used for unlawful discriminatory purposes.
The principal federal statutes and regulations affecting the consumer credit application process are:
Statutes
(1) The Truth in Lending Act;n2
(2) The Equal Credit Opportunity Act;n3
(3) The Fair Credit Reporting Act;n4
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9-171 Banking Law § 171.02
(4) The Fair Housing Act;n5
(5) The Real Estate Settlement Procedures Act.n6
Regulations
(1) Federal Reserve Board Regulation Z to the Truth in Lending Act;n7
(2) Federal Reserve Board Regulation B to the Equal Credit Opportunity Act;n8
(3) Regulations concerning nondiscrimination in real estate lending issued by the Department
of Housing and Urban Development, Office of Thrift Supervision, Federal Deposit Insurance
Corporation, Comptroller of the Currency, and National Credit Union Administration;n9
(4) Department of Housing and Urban Development Regulation X to the Real Estate Settlement
Procedures Act.n10
Legal Topics:
For related research and practice materials, see the following legal topics:
Banking LawConsumer ProtectionGeneral Overview
FOOTNOTES:
(n1)Footnote 1. See, e.g., Ohio Rev. Code § 4112.021(B)(1)(a), that makes it an unlawful discriminatory
practice to grant, withhold, extend or renew credit, or fix the rates, terms or conditions of any form of credit
on the basis of race, color, religion, sex, ancestry, handicap or national origin. Moreover, Ohio Rev. Code §
4112.02(H)(8) prohibits the making of any inquiry, eliciting any information, making or keeping any record,
or using any form of application which contains questions or entries concerning race, color, religion, sex,
ancestry or national origin in connection with the loan of any money, secured or not, for the acquisition, construction, rehabilitation, repair or maintenance of housing.
(n2)Footnote 2. Pub. L. No. 90-321, 82 Stat. 146 (1968), as amended by Pub. L. No. 93-495, 88 Stat.
1521 (1974), Pub. L. No. 94-240, 90 Stat. 257 (1976), Pub. L. No. 96-221, 94 Stat. 132 (1980), Pub. L. No.
100-533, 102 Stat. 2689 (1988), and Pub. L. No. 100-709, 102 Stat. 4725 (1988), 15 U.S.C. §§ 1601 et seq.
(n3)Footnote 3. Pub. L. No. 93-495, 88 Stat. 1521 (1974), as amended by Pub. L. No. 94-239, 90 Stat.
251 (1976), 15 U.S.C. §§ 1691-1691f.
(n4)Footnote 4. Pub. L. No. 91-508, 84 Stat. 1114 (1970), 15 U.S.C. §§ 1681-1681t.
(n5)Footnote 5. Pub. L. No. 90-284, 82 Stat. 73 (1968), 42 U.S.C. §§ 3601-3619, 3631.
(n6)Footnote 6. Pub. L. No. 93-533 (1974), as amended by Pub. L. No. 94-205, 89 Stat. 1157 (1976),
and Pub. L. No. 98-181, 97 Stat. 1153 (1983), 12 U.S.C. § 2601 et seq.
(n7)Footnote 7. 12 C.F.R. Pt. 226.
(n8)Footnote 8. 12 C.F.R. Pt. 202, as amended Dec. 16, 1985, with compliance mandatory on Oct. 1,
1986.
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9-171 Banking Law § 171.02
(n9)Footnote 9. 24 C.F.R. pts. 100-200 (Department of Housing and Urban Development); 12 C.F.R.
Pt. 528 and § 571.24 (Office of Thrift Supervision); 12 C.F.R. Pt. 338 (Federal Deposit Insurance Corporation); 12 C.F.R. Pt. 27 (Comptroller of the Currency); and 12 C.F.R. § 701.31 (National Credit Union Administration).
(n10)Footnote 10. 24 C.F.R. § 3500 et seq.