Avoiding prohibited discrimination practices in automated underwriting systems

ALEXANDRIA, VA (August 2, 2023) — In February 2022, the National Credit Union Administration (NCUA) issued a Letter to Credit Unions addressing Equal Credit Opportunity Act (ECOA) Nondiscrimination Requirements. The letter discussed violations the NCUA has observed involving credit unions, including the prohibited basis variable “age” in their automated underwriting systems. The NCUA is issuing this message as a reminder that having a policy or practice of requiring manual underwriting as an exception to automated underwriting systems based on a minimum or maximum age violates ECOA and its implementing regulation, Regulation B.

An example of such prohibited age discrimination is having system parameters that require applicants or co-applicants to be at least 25 years of age and no older than 70 years of age at the time of application to receive an automatic approval. Applications that meet the system criteria for automatic approval are offered credit pending verification of income and review of collateral, as applicable. Applications that do not meet the system criteria for automatic approval are referred to an underwriter for a manual review.

Also, creditors may not require manual underwriting as an exception to automated underwriting systems based on an applicant’s marital status. An example of such prohibited marital status discrimination is including system parameters that permit automatic approval of married joint applicants but require a manual review of applications submitted by unmarried joint applicants.

Credit unions using automated underwriting systems need to review their systems’ settings and related loan policies and practices to ensure they do not result in age, marital status, or other prohibited basis discrimination. ECOA violations can result in administrative enforcement and referral to the Department of Justice for potential prosecution.

If you have questions about this or other fair lending topics, please get in touch with your NCUA examiner or NCUA’s fair lending team at

About National Credit Union Administration (NCUA)

The NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the United States, the NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of more than 135 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. The NCUA also protects consumers and educates the public on consumer protection and financial literacy issues.


Ben Hardaway


Joe Adamoli

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