CFPB Amends ECOA (Regulation B) to Provide Additional Flexibility in Collecting Consumer Demographic Information

On October 2, 2017, the CFPB published a final rule that amends the Equal Credit Opportunity Act’s implementing Regulation B to facilitate compliance with the revised Home Mortgage Disclosure Act’s implementing Regulation C.  Although the final rule will go into effect on January 1, 2018, the amendment to the appendix to Regulation B, which removes the existing Uniform Residential Loan Application (URLA) form, will go into effect on January 1, 2022.

As background, while the current Regulation C requires covered financial institutions to collect, record, and report applicant demographic information, the revised Regulation C will permit applicants to self-identify using disaggregated ethnic and racial categories beginning January 1, 2018.  However, the collection of this type of information is currently not allowed under Regulation B.  The final rule, which generally tracks the proposed rule that the CFPB released in March 2017, addresses this issue by providing creditors required to collect and retain demographic information under Regulation B with the option of permitting applicants to self-identify in the same manner allowed by the revised Regulation C.

The final rule also makes certain changes to the appendix to Regulation B.  For example, the amended appendix to Regulation B provides creditors with two model form options: (1) a model form for collecting aggregate applicant race and ethnicity information; and (2) a cross-reference to the model form in the appendix to Regulation C for collecting disaggregated applicant race and ethnicity information.  In addition, the final rule removes the existing URLA provided in the appendix to Regulation B.

A copy of the final rule can be found at: https://www.gpo.gov/fdsys/pkg/FR-2017-10-02/pdf/2017-20417.pdf.