Equal Credit Opportunity Act

The Equal Credit Opportunity Act (ECOA) is a United States law (codified at 15 U.S.C. § 1691 et seq.), enacted in 1974, that makes it unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction, on the basis of race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract);[1] to the fact that all or part of the applicant's income derives from a public assistance program; or to the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The law applies to any person who, in the ordinary course of business, regularly participates in a credit decision, including banks, retailers, bankcard companies, finance companies, and credit unions.

Failure to comply with the Equal Credit Opportunity Act's Regulation B can subject a financial institution to civil liability for actual and punitive damages in individual or class actions. Liability for punitive damages can be as much as $10,000 in individual actions and the lesser of $500,000 or 1% of the creditor's net worth in class actions.[2]

Prohibitions

Among other things, the ECOA states that it is illegal for creditors to:

Requirements

The ECOA states that creditors must:

History

When the Banking committee marked up the ECOA, congresswoman Lindy Boggs added the provision banning discrimination due to sex or marital status without informing the other members of the committee beforehand, personally inserting the language on her own and photocopying new versions of the bill.[3] She then told the other committee members, "Knowing the members composing this committee as well as I do, I'm sure it was just an oversight that we didn't have 'sex' or 'marital status' included. I've taken care of that, and I trust it meets with the committee's approval."[3] The committee unanimously approved the bill.[3]

Notes

  1. Dlabay, Les R.; Burrow, James L.; Brad, Brad (2009). Intro to Business. Mason, Ohio: South-Western Cengage Learning. p. 470. ISBN 978-0-538-44561-0. The Equal Credit Opportunity Act prohibits creditors from denying a person credit because of age, race, sex, or marital status.
  2. Regulation B, Equal Credit Opportunity 12 CFR 202.14(b) as stated in Closing the Gap: A Guide to Equal Opportunity Lending, Federal Reserve System of Boston.
  3. 1 2 3 "Former Congresswoman and Ambassador Lindy Boggs Dies at 97". ABC News. July 27, 2013. Retrieved April 15, 2015.

References

External links

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