1. REGULATION B DiscriminationAndLending

2. Enacted in 1974 Enacted in 1974 Requires creditors to base lending decisions on neutral credit factors Requires creditors to base lending decisions on neutral credit factors Borrower’s ability to repay a debt Borrower’s ability to repay a debt Borrower’s willingness to repay a debt Borrower’s willingness to repay a debt

3. REGULATION B Cannot Discriminate based on: Cannot Discriminate based on: Sex Sex Marital Status Marital Status Childbearing intentions Childbearing intentions Part-time income Part-time income Receipt of alimony, child support, or separate maintenance payments Receipt of alimony, child support, or separate maintenance payments

4. REGULATION B In 1976, new guidelines were added to the Reg. In 1976, new guidelines were added to the Reg. Discrimination is prohibited based on: Discrimination is prohibited based on: Race Race Skin Color Skin Color Religion Religion National origin National origin Age Age Receipt of protected income Receipt of protected income

5. REGULATION B Pre-application Pre-application Cannot discourage member from applying Cannot discourage member from applying Cannot accept applications from non- members (employee should determine eligibility for membership first) Cannot accept applications from non- members (employee should determine eligibility for membership first) Cannot discourage certain categories of members from applying for credit Cannot discourage certain categories of members from applying for credit

6. REGULATION B Can ask marital status when: Can ask marital status when: Application is for joint credit Application is for joint credit Loan is to be secured Loan is to be secured Applicant lives in a community property state or relies on property located in one to secure the loan Applicant lives in a community property state or relies on property located in one to secure the loan

7. REGULATION B Can only ask about a spouse if: Can only ask about a spouse if: Spouse will use the account or be contractually liable for it Spouse will use the account or be contractually liable for it Applicant is relying on spouse’s income to repay the loan Applicant is relying on spouse’s income to repay the loan Applicant is relying on alimony, child support, or separate maintenance income to repay the loan Applicant is relying on alimony, child support, or separate maintenance income to repay the loan Applicant lives in a community property state or is relying on assets located in one Applicant lives in a community property state or is relying on assets located in one

8. REGULATION B Age Age Can refuse credit to members who are not age 18 or older Can refuse credit to members who are not age 18 or older If you ask one member whether they expect decreases or interruptions in their income, you must ask them all If you ask one member whether they expect decreases or interruptions in their income, you must ask them all

9. REGULATION B Older Applicants Older Applicants Age 62 and older Age 62 and older Cannot discriminate! Cannot discriminate! Determine whether the security is adequate to cover the loan Determine whether the security is adequate to cover the loan Do they have additional collateral to support repayment? Do they have additional collateral to support repayment?

10. REGULATION B Income Income Cannot refuse to consider any legitimate income such as: Cannot refuse to consider any legitimate income such as: Unemployment compensation Unemployment compensation Social Security Social Security Any type of government assistance Any type of government assistance Alimony Alimony Child support Child support Separate maintenance payments Separate maintenance payments Part-time work Part-time work

11. REGULATION B Income note: Income note: Members have the option of choosing whether or note to use Alimony, child support, and separate maintenance payments in establishing their creditworthiness Members have the option of choosing whether or note to use Alimony, child support, and separate maintenance payments in establishing their creditworthiness You must inform them that they are not required to tell you about this type of income if they do not plan to rely on it to repay the loan You must inform them that they are not required to tell you about this type of income if they do not plan to rely on it to repay the loan

12. REGULATION B Income Income Types of income that must be considered Types of income that must be considered Alimony, child support, separate maintenance payments Alimony, child support, separate maintenance payments Annuity, pension, or other retirement benefits Annuity, pension, or other retirement benefits Social Security or supplemental security income Social Security or supplemental security income Unemployment compensation Unemployment compensation Aid to families with dependent children Aid to families with dependent children Rent and mortgage supplement Rent and mortgage supplement Welfare benefits Welfare benefits

13. REGULATION B Federal government monitoring Federal government monitoring If loan is used to purchase or refinance a principal residence, we are required to request the following information: If loan is used to purchase or refinance a principal residence, we are required to request the following information: Race/national origin, using specific, listed terms Race/national origin, using specific, listed terms Sex Sex Marital status, using specific, listed terms Marital status, using specific, listed terms Age Age

14. REGULATION B Government Monitoring Government Monitoring You may ask the applicant their immigration or residency status and deny credit to an illegal alien You may ask the applicant their immigration or residency status and deny credit to an illegal alien If applicant refuses to answer the required questions: If applicant refuses to answer the required questions: Note the applicant’s refusal on the form Note the applicant’s refusal on the form Note the applicant’s national origin or race and sex based on visual observation Note the applicant’s national origin or race and sex based on visual observation

15. REGULATION B Insurance Insurance Can ask member’s age, sex, and marital status to determine insurance eligibility Can ask member’s age, sex, and marital status to determine insurance eligibility Cannot deny credit because the member does not qualify for insurance Cannot deny credit because the member does not qualify for insurance Credit life Credit life Credit disability Credit disability Health insurance Health insurance Accident insurance Accident insurance

16. REGULATION B Credit Information Credit Information Must consider accounts where both spouses are contractually responsible Must consider accounts where both spouses are contractually responsible Must consider information a member presents disputing a negative credit history Must consider information a member presents disputing a negative credit history Must consider information reported in the name of a spouse or former spouse that accurately reflects the member’s creditworthiness ( member’s income was needed to pay account listed in the name of their spouse) Must consider information reported in the name of a spouse or former spouse that accurately reflects the member’s creditworthiness ( member’s income was needed to pay account listed in the name of their spouse)

17. REGULATION B Decisions Decisions Must be communicated within 30 days Must be communicated within 30 days Approvals may be communicated by telephone or in person Approvals may be communicated by telephone or in person Denials must be mailed an Adverse Action Notice Denials must be mailed an Adverse Action Notice

18. REGULATION B Creditors must give a reason for denying credit Creditors must give a reason for denying credit Creditors may not terminate credit on an existing account because of a change in marital status unless the applicant is unable or unwilling to pay Creditors may not terminate credit on an existing account because of a change in marital status unless the applicant is unable or unwilling to pay

19. REGULATION B Adverse Action Notices Adverse Action Notices Denying credit Denying credit Reducing member’s credit limit Reducing member’s credit limit Refusing to increase amount of credit available when a formal request is made by the member Refusing to increase amount of credit available when a formal request is made by the member

20. REGULATION B Adverse Action Notices must include: Adverse Action Notices must include: Telephone number of consumer reporting agency Telephone number of consumer reporting agency Statement-Consumer Reporting Agency did not make decision Statement-Consumer Reporting Agency did not make decision Notice to receive a free copy of the credit report Notice to receive a free copy of the credit report Notice of member’s right to dispute information in the report Notice of member’s right to dispute information in the report

21. REGULATION B Notification of Adverse Action Notification of Adverse Action Must be in writing and mailed to member within 30 days Must be in writing and mailed to member within 30 days Must be in writing and mailed to member within 90 days of counteroffer Must be in writing and mailed to member within 90 days of counteroffer ECOA Notice ECOA Notice Include list of reasons for denial Include list of reasons for denial Don’t include more than 4 reasons for denial Don’t include more than 4 reasons for denial

22. REGULATION B Guarantor Guarantor Does not share in the loan proceeds but agrees to pay the debit if the borrower defaults Does not share in the loan proceeds but agrees to pay the debit if the borrower defaults Cosigner Cosigner Signs, but does not receive the proceeds Signs, but does not receive the proceeds Equally responsible for loan, whether in default or not Equally responsible for loan, whether in default or not

23. REGULATION B Secured Credit Secured Credit Must have signatures from all parties named on the collateral Must have signatures from all parties named on the collateral Security agreement allows FTWCCU to repossess collateral Security agreement allows FTWCCU to repossess collateral Allows FTWCCU to sell collateral if borrower defaults Allows FTWCCU to sell collateral if borrower defaults Individual that signs security agreement gives up their rights to property if loan default occurs, but is not responsible for remaining debt Individual that signs security agreement gives up their rights to property if loan default occurs, but is not responsible for remaining debt