A creditor lawfully asks a sole mortgage applicant about marital status but offers only married, single and divorced as response categories. Do these categories comply with Regulation B?
Correct Answer
D) No: the permitted categories are married, unmarried and separated
D. Use married, unmarried and separated as the categories. The question assumes the inquiry is permitted; the defect is the response categories. Single, divorced and widowed may explain the unmarried category, but do not replace the required categories. Scope and exceptions: Individual unsecured applications generally have a separate restriction on marital-status inquiries, subject to the stated community-property circumstances. This mortgage question does not assume all individual-credit inquiries are forbidden. Source: Section 1002.5(d)(1) — https://www.consumerfinance.gov/rules-policy/regulations/1002/5/
Why This Is the Correct Answer
D. Use married, unmarried and separated as the categories. The question assumes the inquiry is permitted; the defect is the response categories. Single, divorced and widowed may explain the unmarried category, but do not replace the required categories. Scope and exceptions: Individual unsecured applications generally have a separate restriction on marital-status inquiries, subject to the stated community-property circumstances. This mortgage question does not assume all individual-credit inquiries are forbidden.
Why the Other Options Are Wrong
Option A: Improper only where the applicant refuses to answer the question
The categories are improper regardless of whether the applicant answers.
Option B: Proper where the answer is recorded but not used in the decision
Restrictions on collecting information are not cured by promising not to use it.
Option C: Proper, because marital status affects the 2 credit profiles involved
Marital status does not automatically create two applicants or justify different categories.
Exam Tip
First check whether the inquiry is permitted; then use the permitted categories.
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