15 U.S.C. § 1691 — Scope of prohibition

Page 1623 TITLE 15—COMMERCE AND TRADE § 1691 (Pub. L. 90–321, title VI, § 629, as added Pub. L. 108–159, title II, § 211(b), Dec. 4, 2003, 117 Stat. 1970.) Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section subject to joint regulations establishing ef- fective dates as prescribed by Federal Reserve Board and Federal Trade Commission, except as otherwise provided, see section 3 of Pub. L. 108–159, set out as an Effective Date of 2003 Amendment note under section 1681 of this title. SUBCHAPTER IV—EQUAL CREDIT OPPORTUNITY § 1691. Scope of prohibition (a) Activities constituting discrimination It shall be unlawful for any creditor to dis- criminate against any applicant, with respect to any aspect of a credit transaction— (1) on the basis of race, color, religion, na- tional origin, sex or marital status, or age (provided the applicant has the capacity to contract); (2) because all or part of the applicant’s in- come derives from any public assistance pro- gram; 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 pur- poses 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-wor- thiness; (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 in- quiry is for the purpose of determining the amount and probable continuance of income levels, credit history, or other pertinent ele- ment of credit-worthiness as provided in regu- lations of the Bureau; (3) to use any empirically derived credit sys- tem which considers age if such system is de- monstrably and statistically sound in accord- ance with regulations of the Bureau, except that in the operation of such system the age of an elderly applicant may not be assigned a negative factor or value; (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; or (5) to make an inquiry under section 1691c–2 of this title, in accordance with the require- ments of that section. (c) Additional activities not constituting dis- crimination It is not a violation of this section for a cred- itor to refuse to extend credit offered pursuant to— (1) any credit assistance program expressly authorized by law for an economically dis- advantaged class of persons; (2) any credit assistance program adminis- tered by a nonprofit organization for its mem- bers or an economically disadvantaged class of persons; or (3) any special purpose credit program of- fered by a profit-making organization to meet special social needs which meets standards prescribed in regulations by the Bureau; if such refusal is required by or made pursuant to such program. (d) Reason for adverse action; procedure applica- ble; ‘‘adverse action’’ defined (1) Within thirty days (or such longer reason- able time as specified in regulations of the Bu- reau for any class of credit transaction) after re- ceipt of a completed application for credit, a creditor shall notify the applicant of its action on the application. (2) Each applicant against whom adverse ac- tion 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 writ- ing as a matter of course to applicants against whom adverse action is taken; or (B) giving written notification of adverse ac- tion 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 require- ments of this section only if it contains the spe- cific reasons for the adverse action taken. (4) Where a creditor has been requested by a third party to make a specific extension of cred- it directly or indirectly to an applicant, the no- tification 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 no- tifications in the case of any creditor who did not act on more than one hundred and fifty ap- plications during the calendar year preceding the calendar year in which the adverse action is taken, as determined under regulations of the Bureau. (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) Copies furnished to applicants (1) In general Each creditor shall furnish to an applicant a copy of any and all written appraisals and Page 1624 TITLE 15—COMMERCE AND TRADE § 1691a valuations developed in connection with the applicant’s application for a loan that is se- cured or would have been secured by a first lien on a dwelling promptly upon completion, but in no case later than 3 days prior to the closing of the loan, whether the creditor grants or denies the applicant’s request for credit or the application is incomplete or withdrawn. (2) Waiver The applicant may waive the 3 day require- ment provided for in paragraph (1), except where otherwise required in law. (3) Reimbursement The applicant may be required to pay a rea- sonable fee to reimburse the creditor for the cost of the appraisal, except where otherwise required in law. (4) Free copy Notwithstanding paragraph (3), the creditor shall provide a copy of each written appraisal or valuation at no additional cost to the appli- cant. (5) Notification to applicants At the time of application, the creditor shall notify an applicant in writing of the right to receive a copy of each written appraisal and valuation under this subsection. (6) Valuation defined For purposes of this subsection, the term ‘‘valuation’’ shall include any estimate of the value of a dwelling developed in connection with a creditor’s decision to provide credit, in- cluding those values developed pursuant to a policy of a government sponsored enterprise or by an automated valuation model, a broker price opinion, or other methodology or mecha- nism. (Pub. L. 90–321, title VII, § 701, as added Pub. L. 93–495, title V, § 503, Oct. 28, 1974, 88 Stat. 1521; amended Pub. L. 94–239, § 2, Mar. 23, 1976, 90 Stat. 251; Pub. L. 102–242, title II, § 223(d), Dec. 19, 1991, 105 Stat. 2306; Pub. L. 111–203, title X, §§ 1071(b), 1085(1), title XIV, § 1474, July 21, 2010, 124 Stat. 2059, 2083, 2199.) Editorial Notes AMENDMENTS 2010—Pub. L. 111–203, § 1085(1), substituted ‘‘Bureau’’ for ‘‘Board’’ wherever appearing. Subsec. (b)(5). Pub. L. 111–203, § 1071(b), added par. (5). Subsec. (e). Pub. L. 111–203, § 1474, amended subsec. (e) generally. Prior to amendment, subsec. (e) read as fol- lows: ‘‘Each creditor shall promptly furnish an appli- cant, upon written request by the applicant made with- in a reasonable period of time of the application, a copy of the appraisal report used in connection with the ap- plicant’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.’’ 1991—Subsec. (e). Pub. L. 102–242 added subsec. (e). 1976—Subsec. (a). Pub. L. 94–239 designated existing provisions as cl. (1), expanded prohibition against dis- crimination to include race, color, religion, national origin and age, and added cls. (2) and (3). Subsec. (b). Pub. L. 94–239 designated existing provi- sions as cl. (1) and added cls. (2) to (4). Subsecs. (c), (d). Pub. L. 94–239 added subsecs. (c) and (d). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111–203, title X, § 1071(d), July 21, 2010, 124 Stat. 2059, provided that: ‘‘This section [enacting sec- tion 1691c–2 of this title and amending this section] shall become effective on the designated transfer date.’’ [The term ‘‘designated transfer date’’ is defined in section 5481(9) of Title 12, Banks and Banking, as the date established under section 5582 of Title 12.] Amendment by section 1085(1) of Pub. L. 111–203 effec- tive on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. Amendment by section 1474 of Pub. L. 111–203 effec- tive on the date on which final regulations imple- menting that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of this title. EFFECTIVE DATE Section 708, formerly § 707, of title VII of Pub. L. 90–321, as added by Pub. L. 93–495, title V, § 503, Oct. 28, 1974, 88 Stat. 1525, renumbered and amended by Pub. L. 94–239, §§ 7, 8, Mar. 23, 1976, 90 Stat. 255, provided that: ‘‘This title [enacting this subchapter and provisions set out as notes under section 1691 of this title] takes effect upon the expiration of one year after the date of its en- actment [Oct. 28, 1974]. The amendments made by the Equal Credit Opportunity Act Amendments of 1976 [en- acting section 1691f of this title, amending this section and sections 1691b, 1691c, 1691d, and 1691e of this title, repealing section 1609 of this title, enacting provisions set out as notes under this section, and repealing provi- sions set out as a note under this section] shall take ef- fect on the date of enactment thereof [Mar. 23, 1976] and shall apply to any violation occurring on or after such date, except that the amendments made to section 701 of the Equal Credit Opportunity Act [this section] shall take effect 12 months after the date of enactment [Mar. 23, 1976].’’ SHORT TITLE This subchapter known as the ‘‘Equal Credit Oppor- tunity Act’’, see Short Title note set out under section 1601 of this title. CONGRESSIONAL FINDINGS AND STATEMENT OF PURPOSE Pub. L. 93–495, title V, § 502, Oct. 28, 1974, 88 Stat. 1521, provided that: ‘‘The Congress finds that there is a need to insure that the various financial institutions and other firms engaged in the extensions of credit exercise their responsibility to make credit available with fair- ness, impartiality, and without discrimination on the basis of sex or marital status. Economic stabilization would be enhanced and competition among the various financial institutions and other firms engaged in the extension of credit would be strengthened by an ab- sence of discrimination on the basis of sex or marital status, as well as by the informed use of credit which Congress has heretofore sought to promote. It is the purpose of this Act [see Short Title note set out under section 1601 of this title] to require that financial insti- tutions and other firms engaged in the extension of credit make that credit equally available to all credit- worthy customers without regard to sex or marital sta- tus.’’ § 1691a. Definitions; rules of construction (a) The definitions and rules of construction set forth in this section are applicable for the purposes of this subchapter. (b) The term ‘‘applicant’’ means any person who applies to a creditor directly for an exten-