Compliance Blog

Written by Steve Van Beek

As part of their Regulation B adverse action notices, credit unions are required to provide the name and address of the Federal agency which administers compliance with the Equal Credit Opportunity Act (ECOA) for the credit union.  Until recently, FCUs needed to include the appropriate NCUA Regional Office.  NCUA's creation of its Office of Consumer Protection (OCP) resulted in the OCP taking over the requirements from each Regional Office.  

The Problem?  While NCUA send out a few generic notices regarding updating the address to the Office of Consumer Protection, the language in Regulation B - specifically Appendix A - was not updated.  

Thus, credit unions looking at the language of Regulation B were being provided with different information than the informal notices sent by NCUA.  

The Clarification?  The CFPB's republishing of Regulation B into 12 CFR 1002 also included an update of Appendix A to reflect the new address for NCUA's OCP that should be used for adverse action notices.

The underlying requirement for including the agency address on adverse action notices comes from 12 CFR 1002.9(a)(2) and (b)(1).   

The CFPB's Appendix A now includes this information (for FCUs under $10 billion on assets):

"d. Federal Credit Unions: National Credit Union Administration, Office of Consumer Protection (OCP), Division of Consumer Compliance and Outreach (DCCO), 1775 Duke Street, Alexandria, VA 22314." 

Note:  Credit unions over $10 billion need to include the CFPB's name and address.

The Timing?  The CFPB's republishing indicates that institutions have until January 1, 2013 to make the change.  Here is from 12 CFR 1002.9(b)(1) of Regulation B:

"(b) Form of ECOA notice and statement of specific reasons. (1) ECOA notice. To satisfy the disclosure requirements of paragraph (a)(2) of this section regarding section 701(a) of the Act, the creditor shall provide a notice that is substantially similar to the following: The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The Federal agency that administers compliance with this law concerning this creditor is [name and address as specified by the appropriate agency or agencies listed in Appendix A of this part]. Until January 1, 2013, a creditor may comply with this paragraph (b)(1) and paragraph (a)(2) of this section by including in the notice the name and address as specified by the appropriate agency in Appendix A to 12 CFR Part 202, as in effect on October 1, 2011."

Appendix A to the Federal Reserve's Regulation B (12 CFR 202) is located here and reflects the Regional Offices.

My understanding is state-chartered credit unions would continue to include the FTC information on their adverse action notices.  See Item 9 under Appendix A for "All Other Creditors Not Listed Above."

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The CFPB discussed the January 1, 2013 timeframe in more detail in the preamble to the republished Regulation B.  I know quite a few FCUs have already made the address changes to their adverse action notices, but those who haven't should begin the process now.  

A potential benefit of the CFPB's January 1, 2013 timeframe is it clarifies that notices that were not updated previously were still in compliance with Regulation B.  If an examiner or auditor indicates your credit union should have updated your notice earlier, I'd show them the language in 12 CFR 1002.9(b)(1) and then work towards getting the notice updated.   

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Programming Note - NAFCU's offices will be closed on Monday for the Federal holiday.  We'll be back pinging your inboxes on Tuesday.  Have a great weekend!