STATUTORY APPENDIX

§ 705. Relation to State laws

(a) A request for the signature of both parties to a marriage for the purpose of creating a valid lien, passing clear title, waiving inchoate rights to property, or assigning earnings, shall not constitute discrimination under this title: Provided, however, That this provision shall not be construed to permit a creditor to take sex or marital status into account in connection with the evaluation of creditworthiness of any applicant.

(b) Consideration or application of State property laws directly or indirectly affecting creditworthiness shall not constitute discrimination for purposes of this title.

(c) Any provision of State law which prohibits the separate extension of consumer credit to each party to a marriage shall not apply in any case where each party to a marriage voluntarily applies for separate credit from the same creditor: Provided, That in any case where such a State law is so peempted, each party to the marriage shall be solely responsible for the debt so contracted.

(d) When each party to a marriage separately and voluntarily applies for and obtains separate credit accounts with the same creditor, those accounts shall not be, aggregated or otherwise combined for purposes of determining permissible finance charges or permissible loan ceilings under the laws of any State or of the United States.

(e) Except as otherwise provided in this title, the applicant shall have the option of pursuing remedies under the provisions of this title in lieu of, but not in addition to, the remedies provided by the laws of any State or governmental subdivision relating to the prohibition of discrimination on the basis of sex or marital status with respect to any aspect of a credit transaction.

§ 706. Civil liability

(a) Any creditor who fails to comply with any requirement imposed under this title shall be liable to the aggrieved applicant in an amount equal to the sum of any actual damages sustained by such applicant acting either in an individual capacity or as a representative of a class.

(a) Any creditor who fails to comply with any requirement imposed under this title shall be liable to the aggrieved applicant for punitive damages in an amount not greater than $10,000, as determined by the court, in addition to any actual damages provided in section 706(a): Provided, how

§ 705

ever, That in pursuing the recovery allowed under this subsection, the applicant may proceed only in an individual capacity and not as a representative of a class.

(c) Section 706(b) notwithstanding, any creditor who fails to comply with any requirement imposed under this title may be liable for punitive damages in the case of a class action in such amount as the court may allow, except that as to each member of the class no minimum recovery shall be applicable, and the total recovery in such action shall not exceed the lesser of $100,000 or 1 percent of the net worth of the creditor. In determining the amount of award in any class action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of compliance by the creditor, the resources of the creditor, the number of persons adversely affected, and the extent to which the creditor's failure of compliance was intentional.

(d) When a creditor fails to comply with any requirement imposed under this title, an aggrieved applicant may institute a civil action for preventive relief, including an application for a permanent or temporary injunction, restraining order, or other action.

(e) In the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney's fee as determined by the court shall be added to any damages awarded by the court under the provisions of subsections (a), (b), and (c) of this

section.

(f) No provision of this title imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule, regulation, or interpretation thereof by the Board, notwithstanding that after such act or omission has occurred, such rule, regulation, or interpretation is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

(g) Without regard to the amount in controversy, any action under this title may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation.

§ 707. Effective date

This title takes effect upon the expiration of one year after the date of its enactment.

Effective June 30, 1976, Part 202 is amended as set forth below.

1. Section 202.4(d) is amended by substituting the word "the" for the word "each" before "applicant" in § 4(d) (1) and by adding a new subsection, § 202.4(d) (3).

SECTION 202.4-APPLICATIONS

(d) Equal Credit Opportunity Act notice. (1) Except where application is made by telephone, or orally for an amount of credit to exceed an existing limit on an applicant's open end account, the creditor shall provide the applicant with the following notice in writing:

(2) ...

(3) Where two or more applicants jointly apply for credit, the creditor need furnish the notice required by paragraph (1) to only one of them. In determining which applicant shall receive the notice, the creditor may not select an applicant who is secondarily liable, such as an endorser, co-maker (when designated as a surety) or guarantor.

2. The first sentence of § 202.5(d) (2) is amended to read as follows:

SECTION 202.5-EVALUATION OF APPLICATIONS

(d) Alimony, child support and maintenance income.

(2) Where an applicant chooses to disclose alimony, child support or maintenance payments, a creditor shall consider such payments as income to the extent that such payments are likely to be consistently made.

3. Section 202.9(a) is amended by revising § § 202.9(a) (1) and 202.9(a) (2) as follows, and by adding two new subsections § § 202.9(a) (2) (i) and 202.9(a) (2) (ii).

SECTION 202.9-PRESERVATION OF
RECORDS

(a) For a period ending 15 months after the date a creditor gives the applicant notice of action on an application, the creditor shall retain as to each applicant:

(1) the original or a copy of any application form and all other written or recorded information used in evaluating an application; and

(2) a copy recorded notation of the following if furnished the applicant in written form (or if furnished orally, any notation or memorandum made by the creditor):

(i) the notification of action taken, and

(ii) if applicable, the reasons for denial provided to an applicant in accordance with section 202.5(m); and

(3) any written statement submitted by the applicant alleging discrimination prohibited by the Act or this part.

4. Section 202.9(b) is amended by revising § 202.9(b) (1) and (2), and redesignating them § 202.9(b) (1) (i) and (ii), and by adding subsections 202.9(b) (2) (i) and (ii) to read as follows:

(b) (1) For a period ending 15 months after the date a creditor adversely changes the terms or conditions of credit for an account or terminates an account, the creditor shall retain as to each account, in original form a copy thereof: (i) any written or recorded information concerning such change or termination; and

(ii) any written statement submitted by the applicant alleging discrimination prohibited by the Act or this Part.

(2) for purposes of paragraph (1), an adverse change in the terms or conditions of credit for an account does not include:

(i) a reduction of the credit limit on an account taken after the applicant has failed to make payment as provided in the credit agreement; or

(ii) a change in the terms or conditions of credit affecting all or a substantial portion of the creditor's accounts.

5. Section 202.10 is amended by revising paragraph (c) and adding a new paragraph (f) to read as follows:

SECTION 202.10-CERTAIN SPECIALIZED

CREDIT

(c) Business credit. Business credit shall be subject to the provisions specified in sections 202.10(a), 202.5, 202.7 and 202.9, except that sections 202.5(m)(2), 202.5(m)(3) and 202.9 shall only apply in those transactions involving an application for credit in the amount of $100,000 or less where the applicant requests in writing that the creditor provide such reasons or retain such records. Sections 202.4(e) and 202.5(g) shall not apply to business credit extended in the name of a business firm. As used in this Part, business credit is credit granted for business, commercial or agricultural purposes.

programs.

(f) Credit under student loan Credit granted under student loan programs administered by the Department of Health, Education and Welfare or by State guarantee agencies shall be subject to all the provisions of this Part except that to the extent necessary or appropriate to ascertain and/or verify the applicant's marital status and the financial resources of the applicant and the applicant's spouse, if the applicant is married, sections 202.4(c), 202.5(b) and 202.7(a) shall not apply. 6. Section 202.14 is amended as follows:

SECTION 202.14-TRANSITION PERIODS

Except as provided in section 202.6 with respect to that section, the provisions of this Part shall take effect as follows:

(a)

(b) Sections 202.4(b), 202.4(e), 202.5(d)(2), 202.5(e), 202.5(f), 202.5(g), 202.9(a) and 202.9(b) shall take effect on November 30, 1975.

(c) **

(d) Sections 202.4(c), 202.4(d), 202.5(b) and 202.5(d)(1) shall take effect on June 30, 1976. 7. Effective July 30, 1976, 12 CFR Part 202 is amended by revising § 202.13(b), redesignating § 202.13(c) as § 202.13(d) and adding a new § 202.13(c). Section 202.13 reads as follows:

SECTION 202.13-PENALTIES AND LIABILITIES

(b) Section 706(e) relieves a creditor from civil liability resulting from any act done or omitted in good faith in conformity with any rule, regulation or interpretation by the Board of Governors of the Federal Reserve System, or with any interpretation or approval issued by a duly authorized official or employee of the Federal Reserve System, notwithstanding that after such act or omission has occured, such rule, regulation or interpretation is amended, rescinded or otherwise determined to be invalid for any reason.

(c) (1) Any request for formal Board interpretation or official staff interpretation of Regulation B must be addressd to the Director of the Office of Saver and Consumer Affairs, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Each request for interpretation must contain a complete statement, signed by the person making the request or a duly authorized agent, of all relevant facts of the transaction or credit arrangement relating to the request. True copies of all pertinent documents must be submitted with the request. The relevance of such documents must, however, be set forth in the request and the documents must not merely be incorporated by reference. The request must contain an analysis of the bearing of the facts on the issues and specifying the pertinent provisions of the statute and regulation. Within fifteen business days of receipt of the request, a substantive response will be sent to the person making the request or an acknowledgement will be sent which sets a reasonable time within which a substantive response will be given.

(2) Any request for reconsideration of an official staff interpretation of Regulation B must

be addressed to the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551, within thirty days of the publication of such interpretation in the Federal Register. Each request for reconsideration must contain a statement setting forth in full the reasons why the person making the request believes reconsideration would be appropriate, and must specify and discuss the applicability of the relevant facis, statute and regulations. Within fifteen business days of receipt of such request for reconsideration, a response granting or denying the request will be sent to the person making the request, or an acknowledgement will be sent which sets a reasonable time within which such response will be given.

(3) Pursuant to §706(e) of the Act, the Board has designated the Director and other officials of the Office of Saver and Consumer Affairs as officials "duly authorized" to issue, at their discretion, official staff interpretations of this

Part. This designation shall not be interpreted to include authority to approve particular creditors' forms in any manner.

(4) The type of interpretation issued will be determined by the Board and the designated officials by the following criteria:

(i) Official Board interpretations will be issued upon those requests which involve potentially controversial issues of general applicability dealing with substantial ambiguities in this Part and which raise significant policy questions.

(ii) Official staff interpretations will be issued upon those requests which, in the opinion of the designated officials, require clarification of technical ambiguities in this Part or which have no significant policy implications.

(iii) Unofficial staff interpretations will be issued where the protection of § 706(e) of the Act is neither requested nor required, or where time strictures require a rapid response.

(d) [Redesignated.]