Dear Manager and Board of Directors:
The Federal Reserve Board (FRB) recently published final amendments to Regulation B, which implements the Equal Credit Opportunity Act (ECOA). The most significant amendments are:
- Permissibility of collecting personal characteristics in connection with nonmortgage credit for self-testing purposes only, and
- Record retention for prescreened solicitations.
The rule is effective April 15, 2003; however, mandatory compliance is delayed until April 15, 2004.
The amended rule allows creditors to collect personal characteristics in a self-test for compliance with the ECOA. The self-test must meet regulatory standards. Credit unions that conduct a self-test and request information about personal characteristics must disclose to applicants that the information:
- Is optional,
- Is being collected to monitor for compliance with the ECOA,
- Will not be used in making the credit decision, and
- May be noted based on visual observation or surname (where applicable).
A copy of the final rule is available on the FRB website at: