This checklist can be used for reviewing audit work papers, evaluating bank policies, performing transaction testing, and training, as appropriate. Only complete those aspects of the checklist that specifically relate to the issue being reviewed, evaluated, or tested, and retain those completed sections in the work papers.
Review compliance with these Regulation B provisions in all fair lending examinations that include review of files, and may elect to do so as part of a regular, scheduled supervisory activity during the supervisory cycle. Review the checklist before comparative file review to ensure that they recognize the listed violations. As the file review proceeds, note any violations observed on one master checklist (not checklists for individual transactions). If the
examination does not include a comparative review of files, use the checklist to review in detail 10 diverse files (approvals and denials, different products, etc.).
Obtain explanations for any apparent violations from the bank staff responsible for the transactions.
Some violations on the checklist are not stated in terms of a prohibited basis.
They are violations simply if the bank treated applicants other than as prescribed. Nevertheless, determine also whether the violations occurred selectively on a prohibited basis.
NOTE: Citations are to Regulation B, 12 CFR 202.1 et seq.
When reviewing audit or evaluating bank policies, a “No” answer indicates a possible exception/deficiency and should be explained in the work papers.
When performing transaction testing, a “No” answer indicates a possible violation and should be explained in the work papers. If a line item is not applicable within the area you are reviewing, just indicate “NA.”
Underline the applicable use: Audit Bank Policies Transaction Testing
Apparent Violation (if No) Yes No Basis for Conclusion Rules Concerning Evaluation of Applications
1. To the extent that a credit evaluation system directly considers the age of an applicant, is it empirically derived, demonstrably and statistically sound? (202.6(b)(2)(ii), .2(p)) 2. In an empirically derived, demonstrably and statistically sound credit scoring system is the age of an elderly applicant (62 or older) not assigned a negative factor or value?
(202.6(b)(2)(ii))
3. In a judgmental system, is the applicant’s age or income derived from public assistance considered only for the purpose of determining a pertinent element of creditworthiness?
(202.6(b)(2)(iii))
4. In any system for evaluating
creditworthiness is the age of an applicant 62 or older considered only to favor him or her?
(202.6(b)(2)(iv))
5. When evaluating the applicant’s
creditworthiness, does the bank not consider aggregate statistics or assumptions relative to the likelihood of bearing or rearing children?
(202.6(b)(3))
6. Does the bank count (and not discount or exclude) income derived from part-time employment or a retirement benefit?
(202.6(b)(5))
7. If an applicant relies on income from alimony, child support, or separate
maintenance payments in applying for credit, does the bank consider such payments as income when they are likely to be consistently made? (202.6(b)(5))
8. To the extent it considers credit history, does the bank consider:
a. The credit history, when available, of accounts designated as accounts that the applicant and the applicant’s spouse are permitted to use or for which both are contractually liable? (202.6(b)(6)(i)) b. At the applicant’s request, information from the applicant indicating that past credit performance does not accurately reflect the applicant’s creditworthiness? (202.6(b)(6)(ii))
Apparent Violation (if No) Yes No Basis for Conclusion c. At the applicant’s request, any credit
history in the name of the applicant’s spouse or former spouse that the applicant can demonstrate accurately reflects the
applicant’s creditworthiness? (202.6(b)(6)(iii)) 9. Are married and unmarried applicants evaluated by the same standards?
(202.6(b)(8))
10. Are joint applicants treated in the same manner regardless of existence, absence, or likelihood of a marital relationship?
(202.6(b)(8))
Rules Concerning Extensions of Credit 11. Does the bank allow an applicant to open
or maintain an account in birth-given names or combinations of birth-given and married names, if requested? (202.7(b))
12. Does the bank permit holders of open-end accounts to retain the accounts and not change the terms despite the account-holder’s retiring, or changes in age, name, or marital
status?(202.7(c)(1))
13. If the bank requires reapplication for an open-end account based on a change in marital status of the applicant when the original credit decision was based, in whole or in part, on the income of the spouse; did the bank have information available indicating that the applicant’s income may not support the amount of credit currently available?
(202.7(c)(2))
14. If jointly owned property is relied on to satisfy the standards of creditworthiness in the case of unsecured credit, are nonapplicant joint owners required to sign only instruments related to collateral?(202.7(d)(2))
15. Is an applicant who qualifies individually allowed to obtain credit without a spouse’s or other person’s signature (other than as a joint applicant), or if an additional party is needed to support the credit requested, is the applicant allowed to request a person other than the spouse to serve as the additional
party?(202.7(d) (1) and (5))
16. Does the bank grant credit even if credit life, health, accident, or disability insurance is not available because of the applicant’s age?
(202.7(e))
General Rule 17. Do the bank’s marketing or advertising
materials contain any information that would discourage, on a prohibited basis, a reasonable person from making or pursuing an
application?(202.4(b))