QUESTION
We opt to furnish information on our mortgage loan transactions. We have a few questions involving the reporting of these transactions to consumer report agencies or other creditors. What are our requirements to furnish information involving spouse? Are we required to maintain files in a certain manner? Do we have to keep separate files for each participant to a joint account? Also, what information is furnished when the spouse assumes the mortgage loan?
ANSWER
Under the Equal Credit Opportunity Act (ECOA), creditors are not required to furnish information to the consumer reporting agencies or other creditors, although creditors may be subject to other requirements under which they must furnish information on consumers to consumer reporting agencies. [12 CFR Supplement I to Part 202, Official Staff Interpretations § 202.10-1]
When a creditor furnishes credit information to consumer reporting agencies or other creditors, the creditor must designate:
- Any new account to reflect the participation of both spouses if the applicant’s spouse is permitted to use or is contractually liable on the account (other than as a guarantor, surety, endorser, or similar party); and
- Any existing account to reflect such participation, within ninety days after receiving a written request to do so from one of the spouses. [12 CFR § 202.10(a)]
With respect to maintaining files, the creditor is not required to create or maintain separate files in the name of each participant on a joint or user account, nor is it required to maintain any other, particular system of recordkeeping or indexing. ECOA requires only that a creditor be able to report information on consumer accounts in the name of each spouse. If a creditor receives a credit inquiry about a wife, the creditor should be able to locate her credit file without asking the husband’s name. [12 CFR Supplement to Part 202, Office Staff Interpretations § 202.10-4]
Regarding the spouse assuming the mortgage, when new parties who are spouses undertake a legal obligation on an account, as with the assumption of a mortgage loan, the creditor should change the designation on the account to reflect the new parties and must furnish subsequent credit information on the account in the new names. [12 CFR Supplement I to Part 202, Official Staff Interpretations § 202.10(a)-1]
Jonathan Foxx
Managing Director
Lenders Compliance Group
