There are four major pieces of Regulation B that a potential applicant should be aware of: • Lenders may not discourage anyone from applying for a loan. That prohibition extends to oral, written, or telephone inquiries and applications. Likewise, a lender may not advertise in a manner that would discourage anyone from applying for a loan. • When a lender receives a credit application it may use a traditional, judgmental method of evaluation (e.g., the Five Cs) or it may use an objective methods like credit scoring. Whatever method is used it must be applied uniformly to all applicants for credit without reference to any of the prohibitive bases. • If an application for a business loan is denied and the business has more than $1 million in annual gross revenues the lender may provide a formal or informal notice to the applicant within a reasonable time period (effectively thirty days). A written statement of reasons for denial of the loan application is required only if the applicant makes a written request within sixty days of receiving the first denial notice. If the applicant business has less than $1 million in annual gross revenues the creditor may make the denial notification orally or in writing. But if the lender provides oral notice of the reasons for denial, it must also tell the applicant that it has the right to receive confirmation of those reasons in writing. At the time of application, the lender may advise the applicant in writing of the applicant’s right to a statement of the reasons for denial. That notice must contain the contact information of the lender’s personnel from whom that information may be obtained and the time period within which the applicant must make the request. • A lender may not require the signature of an applicant’s spouse on a loan application. The lender may, however, require the spouse’s signature on documents that create a security interest to support the applicant’s creditworthiness (e.g., requiring the spouse’s signature on a document pledging the value of a home as collateral).
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