preceding the calendar year in which the notification of adverse action is to be given to a particular applicant.

(d) Withdrawn applications. Where an applicant submits an application and the parties contemplate that the applicant will inquire about its status, if the creditor approves the application and the applicant has not inquired within 30 days after applying, then the creditor may treat the application as withdrawn and need not comply with paragraph (a)(1) of this section.

(e) Failure of compliance. A failure to comply with this section shall not constitute a violation when caused by an inadvertent error; provided that, on discovering the error, the creditor corrects it as soon as possible and commences compliance with the requirements of this section.

(f) Notification. A creditor notifies an applicant when a writing addressed to the applicant is delivered or mailed to the applicant's last known address or, in the case of an oral notification, when the creditor communicates with the applicants.

§ 202.10 Furnishing of credit information.

(a) Accounts established on or after June 1, 1977. (1) For every account established on or after June 1, 1977, a creditor that furnishes credit information shall:

(i) Determine whether an account offered by the creditor is one that an applicant's spouse is permitted to use or upon which the spouses are contractually liable other than as guarantors, sureties, endorsers, or similar parties; and

(ii) Designate any such account to reflect the fact of participation of both spouses; 11

(2) Except as provided in paragraph (a)(3) of this section, if a creditor furnishes credit information concerning an account designated under this section (or designated prior to the effective date of this part) to a consumer reporting agency, it shall furnish the information in a manner that will enable the agency to provide access to

11A creditor need not distinguish between participation as a user or as a contractually liable party.

the information in the name of eac spouse.

(3) If a creditor furnishes credit i formation concerning an account de ignated under this section (or desi nated prior to the effective date this part) in response to an inquiry r garding a particular applicant, it sha furnish the information in the nam of the spouse about whom such info mation is requested. 12

(b) Accounts established prior June 1, 1977. For every account estal lished prior to and in existence o June 1, 1977, a creditor that furnishe credit information shall either:

(1) Not later than June 1, 1977

(i) Determine whether the account one that an applicant's spouse, if an is permitted to use or upon which th spouses are contractually liable othe than as guarantors, sureties, endor ers, or similar parties;

(ii) Designate any such account t reflect the fact of participation both spouses: 13 and

(iii) Comply with the reporting r quirements of paragraphs (a)(2) an (a)(3) of this section; or

(2) Mail or deliver to all applicant or all married applicants, in whos name an account is carried on th creditor's records one copy of th notice set forth below. 14 The notic may be mailed with a billing state ment or other mailing. All such no tices shall be mailed or delivered b October 1, 1977. As to open end a counts, this requirement may be sati fied by mailing one notice at any tim prior to October 2, 1977, regardin each account for which a billing state ment is sent between June 1 and Octo ber 1, 1977. The notice may be supple mented as necessary to permit identif cation of the account by the credito or by a consumer reporting agency. creditor need only send notices rela

12 If a creditor learns that new parties hav undertaken payment on an account, the the subsequent history of the account sha be furnished in the names of the new pa ties and need not continue to be furnishe in the names of the former parties. 13 See footnote 11.

14 A creditor may delete the references the "use" of an account when providing n tices regarding closed end accounts.

90-035 0-82--3

ing to those accounts on which it lacks the information necessary to make the proper designation regarding participation or contractual liability.

NOTICE

CREDIT HISTORY FOR MARRIED PERSONS

The Federal Equal Credit Opportunity Act prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age (provided that a person has the capacity to enter into a binding contract); because all or part of a person's income derives from any public assistance program; or because a person in good faith has exercised any right under the Federal Consumer Credit Protection Act. Regulations under the Act give married persons the right to have credit information included in credit reports in the name of both the wife and the husband if both use or are responsible for the account. This right was created, in part, to insure that credit histories will be available to women who become divorced or widowed.

If your account with us is one that both husband and wife signed for or is an account that is being used by one of you who did not sign, then you are entitled to have us report credit information relating to the account in both your names. If you choose to have credit information concerning your account with us reported in both your names, please complete and sign the statement below and return it to us.

Federal regulations provide that signing your name below will not change your or your spouse's legal liability on the account. Your signature will only request that credit information be reported in both your

names.

If you do not complete and return the form below, we will continue to report your credit history in the same way that we do

now.

When you furnish credit information on this account, please report all information concerning the account in both our names.

Account number

Print or type name

Print or type name

Signature of either spouse

(c) Requests to change manner in which information is reported. Within

90 days after receipt of a pro completed request to change manner in which information ported to consumer reporting age and others regarding an accoun scribed in paragraph (b) of this se a creditor shall designate the ac to reflect the fact of participati both spouses. 15 When furnishing i mation concerning any such acc the creditor shall comply with th porting requirements sub graphs (a)(2) and (a)(3) of this sec The signature of an applicant or applicant's spouse on a reques change the manner in which info tion concerning an account is nished shall not alter the legal lia ty of either spouse upon the acc or require the creditor to change name in which the account is car

of

(d) Inadvertent errors. A failur comply with this section shall not stitute a violation when caused by inadvertent error; Provided, That discovering the error the creditor rects it as soon as possible and d mences compliance with the requ ments of this section.

§ 202.11 Relation to State law.

(a) Inconsistent State laws. Exc as otherwise provided in this sect this part alters, affects, or preem only those State laws that are ind sistent with this part and then only the extent of the inconsistency. State law is not inconsistent with t part if it is more protective of an plicant.

(b) Preempted provisions of St law. (1) State law is deemed to be consistent with the requirements the Act and this part and less prot tive of an applicant within the mea ing of section 705(f) of the Act to t extent that such law:

(i) Requires or permits a practice act prohibited by the Act or this pa (ii) Prohibits the individual exte sion of consumer credit to both parti to a marriage if each spouse indivi ually and voluntarily applies for suc credit;

15 See footnote 11.

(iii) Prohibits inquiries or collection of data required to comply with the Act or this part;

(iv) Prohibits asking age or considering age in a demonstrably and statistically sound, empirically derived credit system, to determine a pertinent element of creditworthiness, or to favor an elderly applicant; or

(v) Prohibits inquiries necessary to establish or administer a special purpose credit program as defined by § 202.8.

(2) A determination as to whether a State law is inconsistent with the requirements of the Act and this part I will be made only in response to a request for a formal Board interpretation. All requests for such interpretations, in addition to meeting the requirements of § 202.1(d), shall comply with the applicable provisions of subsections (b)(1) and (2) of Supplement I to this part. A determination shall be based on the factors enumerated in this subsection and, as applicable, subsection (c) of Supplement I. Notice of the interpretation shall be provided as specified in subsection (e)(1) of Supplement I, but the interpretation shall be effective in accordance with § 202.1. The interpretation shall be subject shall be subject to revocation or modification at any time, as provided in subsection (g)(4) of Supplement I.

(c) Finance charges and loan ceilings. If married applicants voluntarily apply for and obtain individual accounts with the same creditor, the accounts shall not be aggregated or otherwise combined for purposes of determining permissible finance charges or permissible loan ceilings under any Federal or State law. Permissible loan ceiling laws shall be construed to permit each spouse to become individually liable up to the amount of the loan ceilings, less the amount for which the applicant is jointly liable. 16 (d) State and Federal laws not affected. This section does not alter or annul any provision of State property laws, laws relating to the disposition of decedents' estates, or Federal or State

16 For example, in a State with a permissible loan ceiling of $1,000, if a married couple were jointly liable for unpaid debt in the amount of $250, each spouse could subsequently become individually liable for $750.

banking regulations directed only to wards insuring the solvency of finan cial institutions.

(e) Exemption for State regulate transactions. (1) In accordance with the provisions of Supplement I to thi part, any State may apply to th Board for an exemption from the re quirements of sections 701 and 702 o the Act and the corresponding provi sions of this part for any class o credit transactions within the State The Board will grant such an exemp tion if:

(i) The Board determines that under the law of that State, that clas of credit transactions is subject to re quirements substantially similar to those imposed under sections 701 and 702 of the Act and the corresponding provisions of this part, or that appli cants are afforded greater protection than is afforded under Sections 701 and 702 of the Act and the correspond ing provisions of this part; and

(ii) There is adequate provision for State enforcement.

(2) In order to assure that the con current jurisdiction of Federal and State courts created in section 706(f of the Act will continue to have sub stantive provisions to which such ju risdiction shall apply; to allow Federa enforcement agencies to retain their authority regarding any class of credi transactions exempted pursuant to paragraph (e)(1) of this section and Supplement I; and, generally, to aid in implementing the Act:

(i) No such exemption shall be deemed to extend to the civil liability provisions of section 706 or the admin istrative enforcement provisions section 704 of the Act; and

O

(ii) After an exemption has been granted, the requirements of the ap plicable State law shall constitute th requirements of the Act and this part except to the extent such State lav imposes requirements not imposed b the Act or this part.

(3) Exemptions granted by th Board to particular classes of credi transactions within specified State will be set forth in Supplement II t this part.

§ 202.12 Record retention.

(a) Retention of prohibited information. Retention in a creditor's files of any information, the use of which in evaluating applications is prohibited by the Act or this part, shall not constitute a violation of the Act or this part where such information was obtained:

(1) From any source prior to March 23, 1977; 17 or

(2) At any time from consumer reporting agencies; or

(3) At any time from any applicant or others without the specific request of the creditor; or

(4) At any time as required to monitor compliance with the Act and this part or other Federal or State statutes or regulations.

(b) Preservation of records. (1) For 25 months after the date that a creditor notifies an applicant of action taken on an application, the creditor shall retain as to that application in original form or a copy thereof: 18

(i) Any application form that it receives, any information required to be obtained concerning characteristics of an applicant to monitor compliance with the Act and this part or other similar law, and any other written or recorded information used in evaluating the application and not return to the applicant at the applicant's request;

(ii) A copy of the following documents if furnished to the applicant in written form (or, if furnished orally, any notation or memorandum with respect thereto made by the creditor):

(A) The notification of action taken; and

(B) The statement of specific reasons for adverse action; and

17 Pursuant to the October 28, 1975 version of Regulation B, the applicable date for sex and marital status information is June 30, 1976.

18"A copy thereof" includes carbon copies, photocopies, microfilm or microfiche copies or copies produced by any accurate information retrieval system. A creditor who uses a computerized or mechanized system need not keep a written copy of a document if it can regenerate the precise text of the document upon request.

(iii) Any written statement s ted by the applicant alleging a tion of the Act or this part.

(2) For 25 months after the that a creditor notifies an applic adverse action regarding an ac other than in connection with a plication, the creditor shall reta to that account, in original form copy thereof: 19

(i) Any written or recorded inf tion concerning such adverse a and

(ii) Any written statement subm by the applicant alleging a violati the Act or this part.

(3) In addition to the requiren of paragraphs (b) (1) and (2), of section, any creditor that has a notice that it is under investigati is subject to an enforcement pro ing for an alleged violation of the or this part by an enforcement ag charged with monitoring that tor's compliance with the Act and part, or that has been served notice of an action filed pursuan section 706 of the Act and § 202.10 (c) of this part, shall retain the in mation required in paragraphs ( and (2) of this section until final position of the matter, unless an e er time is allowed by order of agency or court.

(4) In any transaction involv more than one creditor, any cred not required to comply with § 20 (notifications) shall retain for time period specified in paragraph of this section all written or recor information in its possession conce ing the applicant, including a notat of action taken in connection with a adverse action.

(c) Failure of compliance. A fail to comply with this section shall 1 constitute a violation when caused an inadvertent error.

§ 202.13 Information for monitoring p poses.

(a) Scope and information requeste (1) For the purpose of monitori compliance with the provisions of t Act and this part, any creditor that I ceives an application for consum

19 See footnote 18.

credit relating to the purchase of residential real property, where the extension of credit is to be secured by a lien on such property, shall request as part of any written application for such credit the following information regarding the applicant and joint applicant (if any):

(i) Race/national origin, using the categories American Indian or Alaskan Native; Asian or Pacific Islander; Black; White; Hispanic; Other (Specify);

(ii) Sex;

(iii) Marital status, using the categories married, unmarried, and separated; and

(iv) Age.

(2) "Residential real property" means improved real property used or intended to be used for residential purposes, including single family homes, dwellings for from two to four families, and individual units of condominiums and cooperatives.

(b) Method of obtaining information. Questions regarding race/national origin, sex, marital status, and age may be listed at the creditor's option, either on the application form or on a separate form that refers to the application.

(c) Disclosure to applicant and joint applicant. The applicant and joint applicant (if any) shall be informed that the information regarding race/national origin, sex, marital status, and age is being requested by the Federal government for the purpose of monitoring compliance with Federal antidiscrimination statutes and that those statutes prohibit creditors from discriminating against applicants on those bases. The applicant and joint applicant shall be asked, but not required, to supply the requested information. If the applicant or joint applicant chooses not to provide the information or any part of it, that fact shall be noted on the form on which the information is obtained.

(d) Substitute monitoring program. Any monitoring program required by an agency charged with administrative enforcement under section 704 of the Act may be substituted for the requirements contained in paragraphs (a), (b) and (c) of this section.

INTERPRETATIONS

§ 202.801 Special purpose credit prograi may be authorized by law or lawfull promulgated regulation. Participatin creditors will not violate Regulation | by complying with regulations imple menting special purpose credit pro grams.

(a) In order to provide guidance con cerning the intended coverage 0 § 202.8(a)1 of Regulation B, the Boar interprets a term used in that section as follows: A credit program is consid ered to be "expressly authorized b Federal or State law" if it is author ized by the terms of a Federal or Stat statute or by a regulation lawfully pro mulgated by the administering agenc (i.e., the agency responsible for imple menting the program).

(b) It is the responsibility of the ad ministering agency to ensure that im plementing regulations are consisten with applicable Federal and State law A creditor participating in a loan pro gram expressly authorized by Federa or State law will not violate Regula tion B by complying in good faith with the law authorizing a program or with a regulation promulgated by an ad ministering agency to implement a program that the agency has deter mined is a special purpose credit pro gram under § 202.8a(1) of Regulation B.

(c) In addition, the Board announce that it will not make determination as to whether particular program benefit an "economically disadvan taged class of persons." The Board be lieves that such a determination i more properly made by the agency charged with the administration o the loan program.

[42 FR 40424, Aug. 10, 1977]

'Standards for programs. Subject to th provisions of subsection (b), the Act an this part are not violated if a creditor re fuses to extend credit to an applicant solel because the applicant does not qualif under the special requirements that defin eligibility for the following types of specia purpose credit programs: (1) Any credit a sistance program expressly authorized b Federal or State law for the benefit of a economically disadvantaged class of person