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U.S. Code as of:
01/19/04
Section 1691. Scope of prohibition
(a) Activities constituting discrimination
It shall be unlawful for any creditor to discriminate against any
applicant, with respect to any aspect of a credit transaction -
(1) on the basis of race, color, religion, national origin, sex
or marital status, or age (provided the applicant has the
capacity to contract);
(2) because all or part of the applicant's income derives from
any public assistance program; or
(3) because the applicant has in good faith exercised any right
under this chapter.
(b) Activities not constituting discrimination
It shall not constitute discrimination for purposes of this
subchapter for a creditor -
(1) to make an inquiry of marital status if such inquiry is for
the purpose of ascertaining the creditor's rights and remedies
applicable to the particular extension of credit and not to
discriminate in a determination of credit-worthiness; (!1)
(2) to make an inquiry of the applicant's age or of whether the
applicant's income derives from any public assistance program if
such inquiry is for the purpose of determining the amount and
probable continuance of income levels, credit history, or other
pertinent element of credit-worthiness (!1) as provided in
regulations of the Board;
(3) to use any empirically derived credit system which
considers age if such system is demonstrably and statistically
sound in accordance with regulations of the Board, except that in
the operation of such system the age of an elderly applicant may
not be assigned a negative factor or value; or
(4) to make an inquiry or to consider the age of an elderly
applicant when the age of such applicant is to be used by the
creditor in the extension of credit in favor of such applicant.
(c) Additional activities not constituting discrimination
It is not a violation of this section for a creditor to refuse to
extend credit offered pursuant to -
(1) any credit assistance program expressly authorized by law
for an economically disadvantaged class of persons;
(2) any credit assistance program administered by a nonprofit
organization for its members or an economically disadvantaged
class of persons; or
(3) any special purpose credit program offered by a
profit-making organization to meet special social needs which
meets standards prescribed in regulations by the Board;
if such refusal is required by or made pursuant to such program.
(d) Reason for adverse action; procedure applicable; "adverse
action" defined
(1) Within thirty days (or such longer reasonable time as
specified in regulations of the Board for any class of credit
transaction) after receipt of a completed application for credit, a
creditor shall notify the applicant of its action on the
application.
(2) Each applicant against whom adverse action is taken shall be
entitled to a statement of reasons for such action from the
creditor. A creditor satisfies this obligation by -
(A) providing statements of reasons in writing as a matter of
course to applicants against whom adverse action is taken; or
(B) giving written notification of adverse action which
discloses (i) the applicant's right to a statement of reasons
within thirty days after receipt by the creditor of a request
made within sixty days after such notification, and (ii) the
identity of the person or office from which such statement may be
obtained. Such statement may be given orally if the written
notification advises the applicant of his right to have the
statement of reasons confirmed in writing on written request.
(3) A statement of reasons meets the requirements of this section
only if it contains the specific reasons for the adverse action
taken.
(4) Where a creditor has been requested by a third party to make
a specific extension of credit directly or indirectly to an
applicant, the notification and statement of reasons required by
this subsection may be made directly by such creditor, or
indirectly through the third party, provided in either case that
the identity of the creditor is disclosed.
(5) The requirements of paragraph (2), (3), or (4) may be
satisfied by verbal statements or notifications in the case of any
creditor who did not act on more than one hundred and fifty
applications during the calendar year preceding the calendar year
in which the adverse action is taken, as determined under
regulations of the Board.
(6) For purposes of this subsection, the term "adverse action"
means a denial or revocation of credit, a change in the terms of an
existing credit arrangement, or a refusal to grant credit in
substantially the amount or on substantially the terms requested.
Such term does not include a refusal to extend additional credit
under an existing credit arrangement where the applicant is
delinquent or otherwise in default, or where such additional credit
would exceed a previously established credit limit.
(e) Appraisals; copies of reports to applicants; costs
Each creditor shall promptly furnish an applicant, upon written
request by the applicant made within a reasonable period of time of
the application, a copy of the appraisal report used in connection
with the applicant's application for a loan that is or would have
been secured by a lien on residential real property. The creditor
may require the applicant to reimburse the creditor for the cost of
the appraisal.
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