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	Rob Rutkowski discussed what CUs can, cannot ask atloan application during Wednesday's webcast. – NAFCU photo

April 12, 2012 – A credit union can "try to be the best credit union in the world" and can still run afoul of equal credit opportunity rules if its lending activities – regardless of intent – have the effect of discriminating in a prohibited way, Rob Rutkowski told credit unions in a NAFCU webcast yesterday.

Rutkowski provided several tips for ensuring Reg B compliance, including giving due attention to the regulation's "effects" test. Part of this test, imposed by statute, looks at circumstantial evidence, ignores the creditor's subjective intent and only requires a consumer to show the lender's activities had the effect of discriminating.

Reg B bars discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of income from a public assistance program or the good-faith exercise of one's rights under the Consumer Credit Protection Act. Rutkowski noted, for example, that a creditor cannot ask for a spouse's information or signature unless that person is authorized to use the account or is liable on the account.

Reg B used to be administered by the Federal Reserve Board but was transferred to the CFPB last year under the Dodd-Frank Act. While the CFPB can exercise enforcement and examination authority over institutions with more than $10 billion in assets – that includes only the three largest credit unions – its regulation applies to all institutions. Moreover, he noted, the Department of Justice can be brought in to address violations regardless of an institution's size.

Compliance with Reg B as well as Reg C, implementing the Home Mortgage Disclosure Act, is supervised by the CFPB's Office of Fair Lending and Equal Opportunity, which is headed by Assistant Director Patrice Ficklin.

Yesterday's webcast will remain available on demand through April 11, 2013.