NCUA Q&As – Can an applicant’s age ever be taken into consideration in the credit approval process (for example, when a 90 year old person applies for a 30-year mortgage)?

Compliance > Lending > Fair Lending
Q:   Can an applicant’s age ever be taken into consideration in the credit approval process (for example, when a 90 year old person applies for a 30-year mortgage)?
 
A:  A lender cannot use an applicant’s age as a reason to deny credit since fair lending laws prohibit discrimination based on age.  The lender may ask for the applicant’s age, but may not use age as a factor in the credit decision, providing the applicant is old enough, under state law, to enter into a binding contract.  According to section 1002.6(b)(2) of the commentary for Regulation B, any system of evaluating creditworthiness may favor a credit applicant who is age 62 or older.  A credit program that offers more favorable credit terms to applicants age 62 or older is also permissible.  A program that offers more favorable credit terms to applicants at an age lower than 62 is permissible only if it meets the special-purpose credit requirements of Section 1002.8 of Regulation B.  12 CFR §§ 1002.6, .8.
 
 
ADDITIONAL INFORMATION:
This Q&A was obtained from NCUA’s website, in a document entitled “NCUA Fair Lending Examination and Compliance Program for Federal Credit Unions,” which may be found here: 
 

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