The original Regulation B dealt with discrimination in the extension of credit on the basis of sex or marital status. Later amendments broadened the scope of the act to forbid discrimination in credit transactions on the basis of race, color, religion, national origin, age, receipt of income from public assistance programs and good faith exercise of rights under the Consumer Protection Act.
Education of bank personnel is the most important step in Regulation B compliance. A knowledgeable person with responsibility for compliance will add great dimensions to your program. When your bank is in compliance, not only will pressure from regulators cease, but you will have relieved yourself and your bank of potential criminal and civil liability.
We suggest here minimum procedures which can be amplified to any degree. Of course, you should consult your counsel if you have legal questions which cannot be answered. We recommend that you:
1. Appoint, in writing, an officer of your bank to be responsible for Regulation B implementation and for bank personnel education.
2. Establish nondiscriminatory lending criteria. Use approved form applications when written applications are taken. Answer questions in sequence.
3. Develop a written policy and adhere to it.
4. Publish a list of do’s and don’ts as a part of your written policy and have your employees learn its contents and initial the same.
5. Be sure to give or send the written notice of adverse action in all cases where it is required. If you have not taken a written application, make a memorandum for your files of the circumstances of the adverse action.
6. Establish a procedure to handle customer complaints.
7. Periodically check your program to make sure it is working.