On November 18, 2014 the CFPB issued Bulletin 2014-03 to remind lenders against discrimination in connection with verification of Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) income (herein collectively referred to as “SS income”) received by mortgage applicants. To view and/or print the bulletin in full, click this hyperlink. Below is a brief summary of the main points of the bulletin: 1. ECOA and its implementing Regulation B prohibit lenders from discriminating against a mortgage applicant because all or part of the applicant’s income comes from a public assistance program, which includes SS income. And while they also permit a lender to take into account the length of time an applicant will likely remain eligible for such income in determining creditworthiness, the bulletin warns that fair lending concerns (i.e., disparate treatment or disparate impact) could arise under ECOA and Regulation B if a lender requires documentation beyond what is required by applicable agency or secondary market standards and guidelines to verify that the SS income will likely continue, such as information about the nature of an applicant’s disability or a letter from an applicant’s doctor.
