Equal Credit Opportunity (Regulation B); Revocations or Unfavorable Changes to the Terms of Existing Credit Arrangements

Publisher lists this guidance as withdrawn/rescinded: Equal Credit Opportunity (Regulation B); Revocations or Unfavorable Changes to the Terms of Existing Credit Arrangements, 87 FR 30097 (May 18, 2022); withdrawn on May 12, 2025 .

This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
Rules and Regulations
Federal Register
30097
Vol. 87, No. 96
Wednesday, May 18, 2022
1
85 FR 77987 (Dec. 3, 2020).
2
15 U.S.C. 1691 et seq.
3
12 CFR part 1002.
4
S. Rep. 94–589, 94th Cong., 2nd Sess., at 4,
reprinted in 1976 U.S.C.C.A.N. 403, 406.
5
S. Rep. 93–278, 93rd Cong., 1st Sess., at 16
(1973).
6
Public Law 93–495, sec. 503, 88 Stat. 1521, 1521
(1974).
7
Public Law 93–495, sec. 503, 88 Stat. at 1522
(codified at 15 U.S.C. 1691a(b)).
8
S. Rep. 93–278, at 27 (emphasis added).
9
S. Rep. 93–278, at 17.
10
15 U.S.C. 1691e(a).
11
15 U.S.C. 1691a(g) (‘‘Any reference to any
requirement imposed under this subchapter . . .
includes reference to the regulations of the Bureau
under this subchapter . . . .’’).
12
Public Law 93–495, sec. 503, 88 Stat. at 1522.
13
See 40 FR 49298 (Oct. 22, 1975) (promulgating
12 CFR part 202); 40 FR 42030 (Sept. 10, 1975); 40
FR 18183 (Apr. 25, 1975).
14
12 CFR 202.3(c) (1976); see also 40 FR 49306.
15
40 FR 49298 (quoting 15 U.S.C. 1691(a)).
16
See ECOA Amendments of 1976, Public Law
94–239, 90 Stat. 251.
17
ECOA Amendments of 1976, Public Law 94–
239, sec. 2, 90 Stat. 251 (codified at 15 U.S.C.
1691(a)). In 2021, the CFPB issued an interpretive
rule to clarify that, with respect to any aspect of a
credit transaction, the prohibition against sex
discrimination in ECOA and Regulation B
encompasses sexual orientation discrimination and
gender identity discrimination, including
discrimination based on actual or perceived
nonconformity with sex-based or gender-based
stereotypes and discrimination based on an
applicant’s associations. 86 FR 14363 (Mar. 16,
2021).
18
S. Rep. 94–589, 94th Cong., 2nd Sess., at 2,
reprinted in 1976 U.S.C.C.A.N. 403, 404.
19
15 U.S.C. 1691(d)(2); see also 15 U.S.C.
1691(d)(3) (‘‘A statement of reasons meets the
requirements of this section only if it contains the
specific reasons for the adverse action taken.’’). In
lieu of providing this statement of specific reasons,
a creditor may instead disclose the applicant’s right
Continued
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1002
Equal Credit Opportunity (Regulation
B); Revocations or Unfavorable
Changes to the Terms of Existing
Credit Arrangements
AGENCY: Bureau of Consumer Financial
Protection.
ACTION: Advisory opinion.
SUMMARY: The Consumer Financial
Protection Bureau (CFPB) is issuing this
advisory opinion to affirm that the
Equal Credit Opportunity Act and
Regulation B protect not only those
actively seeking credit but also those
who sought and have received credit.
DATES: This advisory opinion is
applicable on May 18, 2022.
FOR FURTHER INFORMATION CONTACT:
Christopher Davis, Attorney-Advisor;
Office of Fair Lending and Equal
Opportunity, at CFPB_FairLending@
cfpb.gov or 202–435–7000. If you
require this document in an alternative
electronic format, please contact CFPB_
Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION: The CFPB
is issuing this advisory opinion through
the procedures for its Advisory
Opinions Policy.
1
Refer to those
procedures for more information.
I. Advisory Opinion
A. Background
The Bureau is issuing this advisory
opinion to affirm that the Equal Credit
Opportunity Act (ECOA)
2
and
Regulation B
3
protect both those
actively seeking credit and those who
sought and have received credit. ECOA
is a landmark civil rights law that
protects individuals and businesses
against discrimination in accessing and
using credit—‘‘a virtual necessity of
life’’ for most people.
4
Congress enacted
ECOA in 1974, initially to address
‘‘widespread discrimination . . . in the
granting of credit to women.’’
5

Accordingly, ECOA made it unlawful
for ‘‘any creditor to discriminate against
any applicant on the basis of sex or
marital status with respect to any aspect
of a credit transaction.’’
6
From the
beginning, this prohibition has
protected both those actively seeking
credit and those who sought and have
received credit.
Then as now, ECOA defined
‘‘applicant’’ to mean ‘‘any person who
applies to a creditor directly for an
extension, renewal, or continuation of
credit, or applies to a creditor indirectly
by use of an existing credit plan for an
amount exceeding a previously
established credit limit.’’
7
The drafters
of these provisions emphasized that
ECOA’s prohibition on discrimination
‘‘applies to all credit transactions
including the approval, denial, renewal,
continuation, or revocation of any open-
end consumer credit account.’’
8
Among
other examples of the sort of
discrimination against ‘‘applicants’’ that
ECOA would bar, its drafters cited a
scenario in which a lender required a
‘‘newly married woman whose
creditworthiness has otherwise
remained the same’’ to reapply for her
existing credit arrangement as a new
applicant.
9
The Act also created a
private right of action under which
aggrieved ‘‘applicant[s]’’ can hold liable
a creditor that fails to comply with ‘‘any
requirement imposed under [ECOA].’’
10

And it provided that this private right
of action extends to violations of any
requirement imposed under ECOA’s
implementing regulations.
11

Congress originally tasked the Board
of Governors of the Federal Reserve
System (Board) with prescribing those
regulations.
12
The Board issued those
rules, known as Regulation B, the year
after ECOA was enacted and several
days before the Act took effect.
13
From
the beginning, Regulation B made clear
that the new law’s protections against
credit discrimination cover both those
currently applying to receive credit and
those who have already received it. It
did so by defining ‘‘applicant’’ to
expressly include not only ‘‘any person
who applies to a creditor directly for an
extension, renewal or continuation of
credit’’ but also, ‘‘[w]ith respect to any
creditor[,] . . . any person to whom
credit is or has been extended by that
creditor.’’
14
In explaining this
provision, the Board noted that ECOA’s
express terms and its legislative history
‘‘demonstrate that Congress intended to
reach discrimination . . . ‘in any aspect
of a credit transaction.’ ’’
15

Two years after enacting ECOA,
Congress significantly broadened the
Act to prohibit discrimination on bases
in addition to sex and marital status.
16

These bases now generally include
‘‘race, color, religion, national origin,
sex or marital status, or age’’ as well as
the receipt of public-assistance
income.
17
In what the Senate drafters
called ‘‘one of [the amendments’] most
important provisions,’’
18
the
amendments also provided that ‘‘[e]ach
applicant against whom adverse action
is taken shall be entitled to a statement
of reasons for such action from the
creditor.’’
19
The amendments defined
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30098 Federal Register/ Vol. 87, No. 96 / Wednesday, May 18, 2022 / Rules and Regulations
to receive such a statement. 15 U.S.C. 1691(d)(2)(B);
see also 12 CFR 1002.9(a)(2)(ii).
20
15 U.S.C. 1691(d)(6).
21
Fischl v. Gen. Motors Acceptance Corp., 708
F.2d 143, 146 (5th Cir. 1983); see also id. (calling
these provisions ‘‘[p]erhaps the most significant of
the 1976 amendments to the ECOA’’).
22
Treadway v. Gateway Chevrolet Oldsmobile
Inc., 362 F.3d 971, 977–78 (7th Cir. 2004) (quoting
Fischl, 708 F.2d at 146); see also S. Rep. 94–589,
at 4 (calling the notice requirement ‘‘a strong and
necessary adjunct to the antidiscrimination purpose
of the legislation’’).
23
S. Rep. 94–589, at 4.
24
Id.
25
42 FR 1242 (Jan. 6, 1977); 41 FR 49123 (Nov.
8, 1976); 41 FR 29870 (July 20, 1976).
26
12 CFR 1002.2(c)(1)(ii).
27
12 CFR 1002.9(b)(2).
28
41 FR 29870, 29871 (July 20, 1976) (proposed
rule).
29
12 CFR 202.3(c) (1976).
30
12 CFR 202.2(e) (1978) (emphasis added); see
also 42 FR 1242, 1252 (Jan. 6, 1977) (final rule).
31
See 12 CFR 1002.2(e).
32
Public Law 111–203, sec. 1085, 124 Stat. 1376,
2083–84.
33
See 76 FR 79442 (Dec. 21, 2011) (promulgating
12 CFR part 1002 & supplement I).
34
CFPB Supervision and Examination Manual, at
ECOA 7, https://files.consumerfinance.gov/f/
documents/201510_cfpb_ecoa-narrative-and-
procedures.pdf (emphasis added); see also id. at
ECOA 10 (‘‘[a] creditor must preserve any written
or recorded information concerning adverse action
on an existing account as well as any written
statement submitted by the applicant alleging a
violation of the ECOA or Regulation B.’’).
35
See 15 U.S.C. 1691a(e).
36
See 12 CFR 202.3(c) (1976) (expressly defining
the term ‘‘applicant’’ to include ‘‘any person to
whom credit is or has been extended’’).
37
See Brief of Amici Curiae Consumer Fin. Prot.
Bureau, Dep’t of Justice, Bd. of Governors of the
Fed. Reserve Sys., and Fed. Trade Comm’n in
Support of Appellant and Reversal, Fralish v. Bank
of Am., No. 21–2846 (7th Cir. filed Dec. 16, 2021),
https://files.consumerfinance.gov/f/documents/
cfpb_fralish-v-bank-of-america_amicus-brief_2021-
12.pdf; Brief of Amici Curiae Consumer Fin. Prot.
Bureau and Fed. Trade Comm’n, TeWinkle v.
Capital One, N.A., No. 20–2049 (2d Cir. filed Oct.
7, 2020), https://files.consumerfinance.gov/f/
documents/cfpb_amicus-brief_tewinkle-v-capital-
one-na_2020-10.pdf.
38
Credit cards are one of the most commonly
held and widely used financial products in
America—over 175 million Americans hold at least
one credit card. During the COVID–19 pandemic,
credit cards played a vital role as both a source of
credit in emergencies and a payment method as
more transactions occurred online. According to the
CFPB’s 2021 Credit Card Report, about 2%, or over
10 million credit card accounts, were closed in
2020 and consumers with low credit scores are two
to three times more likely to have their accounts
closed than those with a higher credit score. See
Bureau of Consumer Fin. Prot., The Consumer
Credit Card Market (Sept. 2021), https://files.
consumerfinance.gov/f/documents/cfpb_consumer-
credit-card-market-report_2021.pdf. Additionally,
the same report shows that over 10 million accounts
experienced a credit line decrease in 2020. See id.;
see also 5 Reasons Credit Card Companies Close
Accounts Without Notice—And How to Fix Them,
USA TODAY (July 13, 2021), https://www.usatoday.
com/story/money/personalfinance/budget-and-
spending/2021/07/13/5-reasons-a-credit-card-
company-can-close-your-account-with-no-notice/
‘‘adverse action’’ as ‘‘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.’’
20

Thus, since 1976, ECOA has provided
that ‘‘applicants’’ are entitled to an
explanation when the terms of an
existing credit arrangement are altered
or the credit cancelled outright, among
other circumstances.
ECOA’s notice requirements ‘‘were
designed to fulfill the twin goals of
consumer protection and education.’’
21

In terms of consumer protection, ‘‘the
notice requirement is intended to
prevent discrimination ex ante because
‘if creditors know they must explain
their decisions . . . they [will]
effectively be discouraged’ from
discriminatory practices.’’
22
The notice
requirement ‘‘fulfills a broader need’’ as
well by educating consumers about the
reasons for the creditor’s action.
23
As a
result of being informed of the specific
reasons for the adverse action,
consumers can take steps to try to
improve their credit status or, in cases
‘‘where the creditor may have acted on
misinformation or inadequate
information[,] . . . to rectify the
mistake.’’
24

Following the ECOA Amendments of
1976, the Board amended Regulation B,
including by adding new provisions to
implement ECOA’s notice
requirement.
25
The amended rule
defined ‘‘adverse action’’ to include ‘‘[a]
termination of an account or an
unfavorable change in the terms of an
account that does not affect all or
substantially all of a class of the
creditor’s accounts.’’
26
And it required
that adverse action notices give a
‘‘statement of reasons’’ for the action
that is ‘‘specific’’ and ‘‘indicate[s] the
principal reason(s) for the adverse
action.’’
27

Finally, the Board made a ‘‘minor
editorial change’’ to Regulation B’s
definition of ‘‘applicant’’ in order to
‘‘express more succinctly the fact that
the term includes both a person who
requests credit and a debtor,’’ a debtor
being one who has already requested
and received credit.
28
Whereas
Regulation B originally defined
‘‘applicant’’ to include one who
‘‘applies to a creditor directly for an
extension, renewal or continuation of
credit’’ as well as, ‘‘[w]ith respect to any
creditor[,] . . . any person to whom
credit is or has been extended by that
creditor,’’
29
the revised definition
simply stated that ‘‘applicant’’ includes
‘‘any person who requests or who has
received an extension of credit from a
creditor.’’
30
Although the Board revised
other parts of the definition over the
years, it never departed from the
bedrock understanding of the term
‘‘applicant’’ as including any person
‘‘who has received’’ an extension of
credit.
31

The Dodd-Frank Wall Street Reform
and Consumer Protection Act, enacted
in 2010, revoked primary rulemaking
responsibility under ECOA from the
Board and transferred it to the newly
created Bureau.
32

Shortly thereafter, the Bureau
republished the Board’s ECOA
regulations, including the definition of
‘‘applicant,’’ without material change.
33

In addition, the Bureau’s Supervision
and Examination Manual makes clear
that creditors subject to the Bureau’s
supervisory jurisdiction must comply
with ECOA and Regulation B’s
requirements with respect to existing
accounts. For instance, the Examination
Manual explains that ‘‘[n]otification of
adverse action taken on an existing
account must also be made within 30
days.’’
34

B. Coverage
This advisory opinion applies to all
‘‘creditors’’ as defined in section 702 of
ECOA.
35
As used in this advisory
opinion, ‘‘existing account holder’’
refers to an applicant who has applied
for and received an extension of credit.
‘‘Existing account’’ or ‘‘existing credit
arrangement’’ refers to an extension of
credit previously made by a creditor
other than an extension of credit that is
closed or inactive. This advisory
opinion has no application to any other
circumstance and does not offer a legal
interpretation of any other provisions of
law.
C. Legal Analysis
ECOA and Regulation B plainly
protect applicants who have received
credit and are existing account holders,
not just those in the process of applying
for credit. This has been the
longstanding position of the Bureau,
and the view of Federal agencies prior
to the Bureau’s creation. Despite this
well-established interpretation,
36
the
Bureau is aware that some creditors fail
to acknowledge that ECOA and
Regulation B plainly apply to
circumstances that take place after an
extension of credit has been granted,
including a revocation of credit or an
unfavorable change in the terms of a
credit arrangement.
37
In addition, the
Bureau is aware that some creditors fail
to provide applicants with required
notifications that include a statement of
the specific reasons for the adverse
action taken or disclose an applicant’s
right to such a statement.
38
But ECOA’s
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47470647/; ‘My Credit Card Just Got Canceled and
I Don’t Know Why,’ THE CUT (Sept. 11, 2020),
https://www.thecut.com/article/can-my-credit-card-
company-cancel-my-card.html.
39
Nat’l Ass’n of Home Builders v. Defs. of
Wildlife, 551 U.S. 644, 666 (2007) (quotation marks
omitted).
40
519 U.S. 337 (1997).
41
Id. at 341.
42
Id.
43
Id. at 342.
44
15 U.S.C. 1691(a) (emphasis added); see also
Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 218
(2008) (‘‘[T]he word ‘any’ has an expansive meaning
. . . .’’) (quoting United States v. Gonzales, 520
U.S. 1, 5 (1997)).
45
See, e.g., Black’s Law Dictionary 1668 (rev. 4th
ed. 1968) (defining ‘‘transaction’’ to include the
‘‘[a]ct of transacting or conducting any business’’
and defining ‘‘transact’’ as ‘‘equivalent to ‘carry on,’
when used with reference to business’’).
46
12 CFR 1002.2(m) (defining ‘‘credit
transaction’’ to include, among other things, the
‘‘revocation, alteration, or termination of credit’’
and ‘‘collection procedures’’); 12 CFR 202.3(k)
(1976) (defining ‘‘credit transaction’’ to include the
‘‘furnishing of credit information and collection
procedures’’). Accordingly, the Bureau interprets
aspects of the credit transactions enumerated in
Regulation B as including and encompassing the
servicing of that credit, debt collection, loss
mitigation, payment plans, settlements, co-signer
release, and certain other services provided to
existing accountholders.
47
S. Rep. 93–278, 93rd Cong., 1st Sess., at 27
(1973).
48
15 U.S.C. 1691(d)(2).
49
15 U.S.C. 1691(d)(6).
50
15 U.S.C. 1691e(a); see also id. 1691e(b) (a
‘‘creditor, other than a government or governmental
subdivision or agency,’’ shall be liable to the
aggrieved ‘‘applicant’’ for punitive damages); id.
1691e(c) (aggrieved ‘‘applicant’’ may seek relief in
district court).
51
S. Rep. 94–589, at 13.
52
Cf. Robinson, 519 U.S. at 343 (similarly
concluding that the reference to aggrieved
‘‘employees’’ in Title VII’s private right of action
shows that that term is not limited to current
employees).
53
12 CFR 202.3(c) (1976).
54
See S. Rep. 94–589, at 2 (citing the Board’s
rules and noting that the amendments expanded the
Board’s rulemaking authority).
55
See FDIC Improvement Act of 1991, Public Law
102–242, sec. 223, 105 Stat. 2306–07; Dodd-Frank
Act, Public Law 111–203, secs. 1071, 1474, 124
Stat. 2056–57, 2199–2200.
text, history, purpose, and judicial
interpretation all point the same way:
As used in ECOA, the term ‘‘applicant’’
includes persons who applied for and
have received credit. Any uncertainty
about ECOA’s protections for existing
borrowers is dispelled by Regulation B.
a. Statutory Text
‘‘It is a fundamental canon of
statutory construction that the words of
a statute must be read in their context
and with a view to their place in the
overall statutory scheme.’’
39
Reading
together the relevant provisions of
ECOA makes clear that the term
‘‘applicant’’ is not limited to those who
are in the process of applying for credit.
The Supreme Court’s analysis in
Robinson v. Shell Oil Co.
40
is
instructive. In that case, the Court held
that the term ‘‘employees’’ in Section
704(a) of Title VII includes those who
were former employees when the
discrimination occurred. Writing for a
unanimous Court, Justice Thomas
explained that although ‘‘[a]t first blush,
the term ‘employees’ . . . would seem
to refer to those having an existing
employment relationship with the
employer in question,’’ that ‘‘initial
impression . . . does not withstand
scrutiny in the context of § 704(a).’’
41

For one thing, the Court observed,
there is ‘‘no temporal qualifier in the
statute such as would make plain that
§ 704(a) protects only persons still
employed at the time of the
retaliation.’’
42
The same reasoning
applies to the term ‘‘applicant’’ in
ECOA, which is not expressly limited to
those currently in the process of seeking
credit. The Court further noted that ‘‘a
number of other provisions in Title VII
use the term ‘employees’ to mean
something more inclusive or different
than ‘current employees.’ ’’
43
The same
reasoning applies to the term
‘‘applicant’’ used in ECOA.
Reading ECOA’s definition of
‘‘applicant’’ alongside the Act’s other
provisions makes clear that the term
includes applicants who have received
credit and become existing borrowers.
For example, ECOA’s core anti-
discrimination provision protects
‘‘applicant[s]’’ from discrimination
‘‘with respect to any aspect of a credit
transaction’’—not just during the
application process itself.
44
The phrase
‘‘any aspect of a credit transaction’’ is
most naturally read to include both the
initial formation of a credit agreement as
well as the performance of that
agreement.
45
Consistent with this
ordinary meaning, Regulation B has
always defined the term ‘‘credit
transaction’’ to encompass ‘‘every aspect
of an applicant’s dealings with a
creditor,’’ including elements of the
transaction that take place after credit
has been extended.
46
The expansive
language of this provision shows an
intent to sweep broadly, beyond just the
initial process of requesting credit, to
bar discrimination in all parts of a credit
arrangement. Indeed, the main Senate
report accompanying ECOA specifically
noted that ‘‘[t]he prohibition applies to
all credit transactions including . . .
revocation of any open-end consumer
credit account.’’
47

Similarly, ECOA’s disclosure
provision requires that creditors give a
statement of reasons to ‘‘[e]ach
applicant’’ against whom they take
‘‘adverse action.’’
48
ECOA defines
‘‘adverse action’’ to include a
‘‘revocation of credit’’ as well as a
‘‘change in the terms of an existing
credit arrangement.’’
49
These are
actions that can be taken only with
respect to persons who have already
received credit.
ECOA’s private right of action points
in the same direction. It allows an
aggrieved ‘‘applicant’’ to bring suit
against creditors who fail to comply
with ECOA or Regulation B.
50
These
references to ‘‘applicant[s]’’ cannot be
understood to refer only to those with
pending credit applications. Otherwise,
a person whose application was denied
on a prohibited basis would have no
recourse under ECOA’s private right of
action, which Congress intended would
be the Act’s ‘‘chief enforcement tool.’’
51

Instead, these references further confirm
that the term ‘‘applicant’’ is not limited
to those currently applying for credit.
52

b. Legislative History
Congress’s history of amending the
statute strongly supports reading the
statute to include existing borrowers. As
noted, the Board issued Regulation B in
1975, through notice-and-comment
rulemaking, shortly before ECOA took
effect. The rule defined ‘‘applicant’’ to
include ‘‘any person to whom credit is
or has been extended.’’
53
If Congress
thought this definition an unreasonable
departure from the statute it had just
passed, it would surely have given some
sign of that when it amended and
expanded ECOA the following year. Nor
is there any doubt that the drafters of
those statutory amendments were
generally aware of the new Regulation
B, as they cited parts of it in explaining
their bill.
54

But the 1976 amendments did not
limit the reasonable definition of
‘‘applicant’’ that the Board had
promulgated just months before. To the
contrary, the 1976 amendments added
new provisions—such as the ones
entitling ‘‘applicants’’ to a statement of
reasons when their credit is revoked or
modified—that make sense only if
‘‘applicant’’ is understood to include
existing borrowers, as stated in
Regulation B. Nor has Congress ever
amended the statutory definition of
‘‘applicant’’ or otherwise expressed
disapproval of the understanding of that
term in Regulation B, despite revising
the statute multiple times since 1976.
55

‘‘[W]hen,’’ as here, ‘‘Congress revisits
a statute giving rise to a longstanding
administrative interpretation without
pertinent change, the ‘congressional
failure to revise or repeal the agency’s
interpretation is persuasive evidence
that the interpretation is the one
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56
CFTC v. Schor, 478 U.S. 833, 846 (1986)
(quoting NLRB v. Bell Aerospace Co., 416 U.S. 267,
274–75 (1974)).
57
Cf. S. Rep. 93–278, at 17 (citing this very
scenario as an example of the discrimination
against ‘‘applicants’’ that ECOA prohibits).
58
77 F.3d 492 (10th Cir. 1996) (unpublished table
decision).
59
Id. at *2.
60
Id. (quoting 15 U.S.C. 1691(a)).
61
Id. (emphasis added) (quoting Miller v.
American Express Co., 688 F.2d 1235, 1239 (9th Cir.
1982)).
62
Id.
63
Id.
64
No. 10–cv–785, 2010 WL 3732195 (N.D. Ill.
Sept. 17, 2010).
65
Id. at *4–5.
66
Id. at *4.
67
Id. at *4 n.2.
68
See, e.g., TeWinkle v. Capital One, N.A., No.
1:19–cv–01002, 2019 WL 8918731, at *4–5
(W.D.N.Y. Dec. 11, 2019); Kalisz v. Bank of
America, N.A., No. 1:18–cv–00516, 2018 WL
4356768, at *2–3 (E.D. Va. Sept. 11, 2018).
69
See 12 CFR 1002.2(e) (including in the
definition ‘‘any person . . . who has received an
extension of credit from a creditor’’); see also 12
CFR 202.3(c) (1976) (including in the definition
‘‘any person to whom credit is or has been extended
by [a] creditor’’).
70
See, e.g., 12 CFR 1002.2(m) (defining ‘‘credit
transaction’’ to mean ‘‘every aspect of an
applicant’s dealings with a creditor regarding an
application for credit or an existing extension of
credit’’) (emphasis added).
71
15 U.S.C. 1691b(a).
72
Id.
intended by Congress.’ ’’
56
That maxim
applies with particular force here: The
first time Congress revisited the statute
after the Board defined ‘‘applicant’’ to
include existing borrowers, Congress
enacted new provisions that implicitly
approved the Board’s interpretation by
requiring that creditors provide an
explanation for adverse actions that can
be taken only with respect to existing
borrowers.
c. Statutory Purpose
Reading ‘‘applicant’’ to protect
individuals and businesses from
discrimination both during the process
of requesting credit and once credit has
been extended furthers ECOA’s purpose.
It prevents a creditor from canceling an
existing account because of a borrower’s
race. It bars a creditor from unfavorably
modifying the terms of an existing
account—perhaps by lowering the
amount available on a line of credit—
because of a borrower’s national origin.
It stops a creditor from requiring women
with existing accounts to reapply for
their credit upon getting married.
57
And
it ensures that a creditor would be
required to provide a statement of
reasons to the applicant in any of these
situations. This is the most plausible
interpretation of ECOA.
Finally, reading ‘‘applicant’’ in this
way—i.e., ECOA protects applicants
from discrimination both during the
process of requesting credit and once
credit has been extended—precludes
obvious paths to evasion. A creditor that
wished to deny credit applications on a
prohibited basis, or to offer credit on
inferior terms for the same prohibited
reason, cannot do so by simply
extending credit on the terms requested
and later revoking or amending the
terms of the credit arrangement. Nor can
a creditor use similar means to avoid
ever having to explain to an applicant
the reasons for an adverse action. This
interpretation of ECOA, therefore,
forecloses a potential loophole that
could effectively swallow much of the
Act. Such a loophole would be plainly
inconsistent with ECOA.
d. Judicial Precedent
Those courts that have properly read
the term ‘‘applicant’’ in its statutory
context, including the only court of
appeals to have addressed the issue,
have agreed that the statute protects
existing borrowers. In Kinnell v.
Convenient Loan Co.,
58
the Tenth
Circuit considered a claim that a
creditor discriminated in violation of
ECOA when it refused to accept a late
payment on an existing loan and instead
accelerated the remaining balance due.
The court rejected the argument that the
plaintiff was not an ‘‘applicant’’ under
ECOA because he was no longer actively
seeking credit.
59
ECOA, the court
explained, prohibits discrimination
‘‘with respect to any aspect of a credit
transaction,’’
60
and was meant ‘‘to
protect people from the ‘denial or
termination of credit’ ’’ on a prohibited
basis.
61
The lender’s reading of
‘‘applicant’’ would mean that ‘‘any sua
sponte action on the part of the creditor
. . . would not be actionable. Such an
interpretation improperly narrows the
scope of the ECOA.’’
62
The court noted
that its reading of ‘‘applicant’’ was
directly supported by Regulation B.
63

At least one district court has reached
the same conclusion. In Powell v.
Pentagon Fed. Credit Union,
64
the court
held that the plaintiff, who alleged that
his existing credit plan was terminated
on a prohibited basis, was an
‘‘applicant’’ under ECOA. The court
relied on ECOA’s requirement that
‘‘applicants’’ receive notice when their
credit is revoked and on the
longstanding definition in Regulation
B.
65
The court observed that the
contrary interpretation would be wholly
at odds with ECOA’s purposes because
it ‘‘would preclude a plaintiff with an
existing account from bringing a claim
for the discriminatory revocation of that
account.’’
66
The court found nothing to
‘‘suggest[ ] that Congress’ intent to
discourage discrimination against
applicants somehow ceases when the
alleged discrimination is against
existing credit customers.’’
67

The Bureau acknowledges that a few
other district court decisions have
interpreted ‘‘applicant’’ to include only
persons actively seeking credit, but the
Bureau does not believe this
interpretation is persuasive.
68
No court
of appeals has endorsed these district
courts’ narrow reading. These district
court decisions read ‘‘applicant’’ in
isolation instead of reading this
statutory term in context, as required by
the Supreme Court. For example, these
decisions did not attempt to square their
interpretation with ECOA’s requirement
that ‘‘applicants’’ receive an explanation
when their existing credit is terminated
or modified. Nor did they grapple with
the clear loophole their interpretation
would create or the degree to which it
would frustrate the Act’s remedial
purposes.
e. Regulation B
Regulation B has always defined the
term ‘‘applicant’’ to include those who
applied for and have received credit.
69

Other provisions reflect the same
interpretation.
70
Neither the Board nor
the Bureau has ever amended the rule
to reflect a contrary understanding of
the term.
As described above, the best
interpretation of ECOA is that the term
‘‘applicant’’ includes existing
borrowers. It was thus reasonable for the
Board and then the Bureau to adopt that
interpretation in Regulation B. Adopting
the contrary reading would have led to
the serious textual inconsistencies
described above and run directly
contrary to the statute’s purposes.
Regulation B’s definition avoids those
difficulties and, in the process, serves to
‘‘carry out’’ and ‘‘effectuate’’ the
purposes of ECOA.
71
And because the
contrary interpretation would open a
glaring loophole in ECOA, Regulation
B’s definition is ‘‘necessary or proper
. . . to prevent circumvention or
evasion’’ of the Act.
72

Notably, Regulation B has expressly
included existing borrowers as
applicants since the rule was first
promulgated through notice-and-
comment rulemaking in 1975. Indeed,
the interpretation of ‘‘applicant’’
discussed here has been confirmed by
numerous Federal agencies for decades.
For example, nine separate agencies or
offices, including the Department of
Justice, Federal Trade Commission, and
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30101 Federal Register/ Vol. 87, No. 96 / Wednesday, May 18, 2022 / Rules and Regulations
73
Policy Statement on Discrimination in Lending,
59 FR 18266, 18268 (Apr. 15, 1994).
74
See Interagency Fair Lending Examination
Procedures, at ii (Aug. 2009), available at https://
go.usa.gov/xeY37.
75
Bureau of Consumer Fin. Prot., Equal Credit
Opportunity Act Examination Procedures, at 1 (Oct.
2015), available at https://go.usa.gov/xekcN.
76
See, e.g., In re American Express Centurion
Bank and American Express Bank, FSB, No. 2017–
CFPB–0016, 2017 WL 7520638 (Aug. 23, 2017)
(consent order resolving claims that creditors
discriminated against existing borrowers on the
basis of race and national origin by, for example,
subjecting certain borrowers to more aggressive
collection practices).
77
12 U.S.C. 5512(b)(1). The relevant provisions of
ECOA and Regulation B form part of Federal
consumer financial law. 12 U.S.C. 5481(12)(D), (14).
78
15 U.S.C. 1691e(e).
79
5 U.S.C. 553(b).
80
5 U.S.C. 603(a), 604(a).
81
44 U.S.C. 3501–3521.
82
5 U.S.C. 801 et seq.
the Board, previously published a
statement confirming their view that
ECOA prohibits discrimination in the
treatment of existing borrowers, such as
by ‘‘[t]reat[ing] a borrower differently in
servicing a loan or invoking default
remedies’’ or ‘‘[using] different
standards for pooling or packaging a
loan in the secondary market.’’
73
The
same view is reflected in the manual
used by the Federal Deposit Insurance
Corporation, Office of the Comptroller
of the Currency, and other financial
regulators to conduct examinations of
financial institutions for compliance
with fair lending laws.
74
The Bureau has
consistently taken the same view of
‘‘applicant,’’ including by reissuing the
Board’s original definition; issuing
guidance that Regulation B ‘‘covers
creditor activities before, during, and
after the extension of credit’’;
75
and
taking enforcement action to address
violations of ECOA against existing
borrowers.
76
In short, the Bureau’s
interpretation is longstanding and well
established.
II. Regulatory Matters
This advisory opinion is an
interpretive rule issued under the
Bureau’s authority to interpret ECOA
and Regulation B, including under
section 1022(b)(1) of the Dodd-Frank
Wall Street Reform and Consumer
Protection Act, which authorized
guidance as may be necessary or
appropriate to enable the Bureau to
administer and carry out the purposes
and objectives of Federal consumer
financial laws.
77

By operation of ECOA section 706(e),
no provision of ECOA imposing any
liability applies to any act done or
omitted in good faith in conformity with
this interpretive rule, notwithstanding
that after such act or omission has
occurred, the interpretive rule is
amended, rescinded, or determined by
judicial or other authority to be invalid
for any reason.
78

As an interpretive rule, this rule is
exempt from the notice-and-comment
rulemaking requirements of the
Administrative Procedure Act.
79

Because no notice of proposed
rulemaking is required, the Regulatory
Flexibility Act does not require an
initial or final regulatory flexibility
analysis.
80
The Bureau also has
determined that this interpretive rule
does not impose any new or revise any
existing recordkeeping, reporting, or
disclosure requirements on covered
entities or members of the public that
would be collections of information
requiring approval by the Office of
Management and Budget under the
Paperwork Reduction Act.
81

Pursuant to the Congressional Review
Act,
82
the Bureau will submit a report
containing this interpretive rule and
other required information to the U.S.
Senate, the U.S. House of
Representatives, and the Comptroller
General of the United States prior to the
rule’s published effective date. The
Office of Information and Regulatory
Affairs has designated this interpretive
rule as not a ‘‘major rule’’ as defined by
5 U.S.C. 804(2).
Rohit Chopra,
Director, Consumer Financial Protection
Bureau.
[FR Doc. 2022–10453 Filed 5–17–22; 8:45 am]
BILLING CODE 4810–AM–P
POSTAL SERVICE
39 CFR Part 111
Domestic Competitive Products
Pricing and Mailing Standards
Changes
AGENCY: Postal Service
TM
.
ACTION: Final rule.
SUMMARY: The Postal Service is
amending Mailing Standards of the
United States Postal Service, Domestic
Mail Manual (DMM
®
), to reflect changes
to pricing and mailing standards for
certain competitive products.
DATES: Effective: July 10, 2022.
FOR FURTHER INFORMATION CONTACT:
Steven Jarboe at (202) 268–7690,
Margaret Pepe (202) 268–3078, or Garry
Rodriguez at (202) 268–7281.
SUPPLEMENTARY INFORMATION: This final
rule describes new price and product
features for competitive products, by
class of mail, established by the
Governors of the United States Postal
Service
®
. New prices are available
under Docket Number CP2022–62 on
the Postal Regulatory Commission (PRC)
website at https://www.prc.gov, and on
the Postal Explorer
®
website at https://
pe.usps.com.
The Postal Service will revise Mailing
Standards of the United States Postal
Service, Domestic Mail Manual (DMM),
to reflect changes to certain pricing and
mailing standards for the following
competitive products:
•Priority Mail
®
.
•Parcel Select
®
.
•Return Services.
•Other.
Competitive price and product
changes are identified by product as
follows:
Priority Mail
Priority Mail Commercial Plus Cubic
Currently, Commercial Plus cubic
prices are available to Priority Mail
customers whose account volumes
exceeded 50,000 pieces in the previous
calendar year and have a customer
commitment agreement with the Postal
Service.
The Postal Service is revising the
DMM to remove the volume
requirements for Priority Mail
Commercial Plus Cubic prices. The
Postal Service will also eliminate the
requirement to have a customer
commitment agreement for cubic
pricing. Priority Mail cubic prices will
now be available to all commercial
customers.
Priority Mail Maximum Insurance
Indemnity
The Postal Service is proposing to
make the maximum insurance
indemnity included with retail and
commercial priced Priority Mail limited
to a maximum liability of $100.00. See
Federal Register document, New
Mailing Standards for Domestic Mailing
Services Products (87 FR 21601–21603),
for additional information.
Parcel Select
Parcel Select Ground Cubic
The Postal Service is implementing
cubic pricing under the Parcel Select
Ground price category. Parcel Select
Ground cubic pricing will be available
to eligible Parcel Select Ground
customers for rectangular,
nonrectangular, and soft pack
mailpieces. Each mailpiece must
measure 1 cubic foot or less, weigh 20
pounds or less, and the longest
dimension may not exceed 18 inches.
Cubic-priced mailpieces may not be
rolls or tubes. Parcel Select Ground
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