What type of national inquiries are permitted under Regulation B?

Under Regulation B, which implements the Equal Credit Opportunity Act (ECOA), lenders are prohibited from discriminating against applicants based on certain characteristics, including national origin and immigration status. While it is important for lenders to gather necessary information for decision-making, they must do so without violating anti-discriminatory laws.

Inquiries about permanent residence and immigration status are permitted because they directly relate to the lender's ability to assess the applicant's eligibility for credit. Understanding whether an applicant is a permanent resident or holds a different immigration status helps the lender determine the level of risk and compliance with other relevant regulations, such as verifying the applicant's ability to repay the loan.

This type of inquiry helps establish an individual's right to reside and work in the country, which is crucial for lending decisions. On the other hand, inquiries about citizenship, ethnicity, or travel history are either not directly related to lending practices or could lead to discriminatory practices. Therefore, asking about permanent residence and immigration status aligns with the regulatory framework, focusing on legitimate factors that affect creditworthiness.