Regulation B is a part of the Equal Credit Opportunity Act (ECOA) that outlines the rules that lenders must adhere to when obtaining credit information from applicants. The purpose of Regulation B is to prevent discrimination against applicants in any aspect of a credit transaction. Some key features of Regulation B include:

• Prohibited Information: Regulation B prohibits creditors from requesting and collecting specific personal information about an applicant that has no bearing on the applicants ability or willingness to repay the credit requested and could be used to discriminate against the applicant.

• Adverse Action Notices: Regulation B mandates that lenders provide explanations to rejected applicants within 30 days of receiving their completed applications.

• Record Retention: Regulation B provides specific record retention requirements for creditors.

• Special-Purpose Credit Programs: The ECOA and Regulation B allow creditors to establish special-purpose credit programs for applicants who meet certain eligibility requirements.

Regulation B applies to all persons who, in the ordinary course of business, regularly participate in the credit decision, including setting the terms of the credit. The term “creditor” includes a creditor’s assignee, transferee, or subrogee who so participates. Creditors that fail to comply with Regulation B are subject to punitive damages.