Regulation B Record Retention Requirements

C

Regulation B, also known as the Equal Credit Opportunity Act (ECOA), is a federal law that prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or the fact that the applicant receives income from a public assistance program.

Under Regulation B, lenders are required to retain certain records related to credit applications, including those from businesses with annual gross revenues in excess of $1,000,000. These record retention requirements are intended to ensure that lenders can provide evidence of compliance with the law if they are ever audited or sued for alleged discrimination.

Out of the given answer choices, option C is correct. Specifically, the bank must retain records for 12 months if a written statement of adverse action is requested within 60 days after notifying the applicant of the action taken.

This means that if the bank denies the credit application or takes other adverse action against the applicant, such as offering less favorable terms, and the applicant requests a written explanation of the reasons for the action within 60 days, the bank must retain the application and related records for at least 12 months from the date of the application. If the applicant does not request a written statement of adverse action within 60 days, the bank must retain the records for 25 months from the date of application.

Option A is incorrect because the bank must retain the records for at least 25 months, not just 30 or 90 days. Option B is also incorrect because there are no waste disposal rules promulgated by the EPA that specifically apply to credit application records, and even if there were, the bank would be required to retain the records for at least 25 months. Option D is also incorrect because the bank must retain the records for at least 25 months, not just 12.