Equal Credit Opportunity

Credit is needed by millions to finance their dreams of a home, education or business.   The Equal Credit Opportunity Act (ECOA) was enacted to ensure that all consumers are given an equal opportunity to get credit.   Although there are various other factors involved in extending credit (income, length of employment, credit history), the ECOA seeks to level the playing field.

This law is to protect you when you seek credit with any creditor who regularly provides credit, including banks, small loan and finance companies, retail and department stores, credit card companies, and credit unions. Real estate brokers who arrange financing are also covered by the law and businesses applying for credit   are protected by the law.

Creditors are not allowed to do the following:

Discourage or dissuade you from applying because of your sex, marital status, age, race, national origin, or because you receive public assistance.

Request that you reveal your sex, race, national origin, or religion. A creditor may ask you to voluntarily disclose this information (except for religion) if you're applying for a real estate loan. This information helps federal agencies enforce anti-discrimination laws. You may be asked about your residence or immigration status.

Ask if you're widowed or divorced. When allowed to ask marital status, a creditor may o­nly use the terms: married, unmarried, or separated .

Ask about your marital status if you're applying for a separate, unsecured account. A creditor may ask you to provide this information if you live in   a community property state such as: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington. A creditor in any state may ask for this information if you apply for a joint account or o­ne secured by property.

Request information about your spouse, except when your spouse is applying with you; your spouse will be allowed to use the account; you are relying o­n your spouse's income or o­n alimony or child support income from a former spouse; or if you reside in a community property state.

Ask about your plans for having or raising children.

Ask if you receive alimony, child support, or separate maintenance payments, unless you're first told that you don't have to provide this information if you won't rely o­n these payments to get credit. A creditor may ask if you have to pay alimony, child support, or separate maintenance payments.

  A Creditor May Not...

Use your sex, marital status, race, national origin, or religion as a consideration.

Use whether you have a telephone listing in your name as a determination.   A creditor may consider whether you have a phone.

Consider the racial make-up of the people in the neighborhood where you want to buy, refinance or improve a house with borrowed money.

May consider your age in the following situations:

(a) you're too young to sign contracts, generally younger than 18 years of age;

(b) you're 62 or older, and the creditor will favor you because of your age;

  (c) it's used to determine the meaning of other factors important to creditworthiness. For example, a creditor could use your age to determine if your income might drop because you're about to retire;

  (d) it's used in a valid scoring system that favors applicants age 62 and older. A credit-scoring system assigns points to answers you provide to credit application questions. For example, your length of employment might be scored differently depending o­n your age.

In Evaluating Your Income, A Creditor May Not...

(a) Decline consideration of   public assistance income the same way as other income.

(b) Discount income because of your sex or marital status. For example, a creditor cannot count a man's salary at 100 percent and a woman's at 75 percent. A creditor may not assume a woman of childbearing age will stop working to raise children.

(c) Discount or refuse to consider income because it comes from part-time employment or pension, annuity, or retirement benefits programs.

(d) Refuse to consider regular alimony, child support, or separate maintenance payments. A creditor may ask you to show that you have received this income o­n a consistent basis.

You Also Have The Right To...

(a) Have credit in your maiden name your first and your spouse's last name, or your first name and a combined last name.

(b) Get credit without a cosigner, if you meet the lender's standards.

(c) Have a cosigner other than your husband or wife, if o­ne is necessary.

(d) Keep your own accounts after you change your name, marital status, reach a certain age, or retire, unless the creditor has evidence that you're not willing or able to pay.

(e) Be told whether your application was accepted or rejected within 30 days of filing a complete application.

Find out why your application was rejected. The creditor must give you a notice that tells you either the specific reasons for your rejection or your right to learn the reasons if you ask within 60 days.

Acceptable reasons include: "Your income was low," or "You haven't been employed long enough." Unacceptable reasons are: "You didn't meet our minimum standards," or "You didn't receive enough points o­n our credit-scoring system." Indefinite and vague reasons are illegal, so ask the creditor to be specific.

Find out why you were offered less favorable terms than you applied for, unless you accept the terms. Ask for details.   Less favorable terms include higher finance charges or less money than you   requested.

Find out why your account was closed or why the terms of the account were made less favorable unless the account was inactive or delinquent.

Important Note for Women  

A good credit history, a record of how you paid past bills, is often necessary to get credit. This factor hurts many married, separated, divorced, and widowed women. Women often lose their credit histories when they marry and change their names or creditors reported accounts shared by married couples in the husband's name o­nly.   Women, if you're married, divorced, separated, or widowed, contact your local credit bureau(s) to make sure all relevant information is in a file under your own name.  

If You Suspect Discrimination...

Contact the creditor.   Let them know that you are aware of your rights under the law. The creditor may discover an error or reverse the decision.

Check with your state Attorney General to see if the creditor violated state equal credit opportunity laws. Your state may decide to prosecute the creditor.

Bring a case in federal district court. If you win, you can recover damages, including punitive damages. You also can obtain compensation for attorney's fees and court costs. An attorney can advise you o­n how to proceed.

Join with others that have been harmed   and file a class action suit. You may recover punitive damages for the group of up to $500,000 or o­ne percent of the creditor's net worth, whichever is less.

Report violations to the right government agency. If you're denied credit, the creditor must give you the name and address of the agency to contact. While some of these agencies don't resolve individual complaints, the information you provide helps them decide which companies to investigate. A list of agencies follows.

If a retail store, department store, small loan and finance company, mortgage company, oil company, public utility, state credit union, government lending program, or travel and expense credit card company is involved, contact:

Consumer Response Center
Federal Trade Commission
Washington, DC 20580.

The FTC cannot intervene in individual disputes, but the information you provide may indicate a pattern of possible law violations that require action by the Commission.

If your complaint concerns a nationally chartered bank (National or N.A. will be part of the name), write to:

Comptroller of the Currency
Compliance Management
Mail Stop 7-5
Washington, DC 20219

If your complaint concerns a state, chartered bank that is insured by the Federal Deposit Insurance Corporation but is not a member of the Federal Reserve System, write to:

Federal Deposit Insurance Corporation
Consumer Affairs Division
Washington, DC 20429

If your complaint concerns a federally, chartered or federally, insured savings and loan association, write to:

Office of Thrift Supervision
Consumer Affairs Program
Washington, DC 20552

If your complaint concerns a federally, chartered credit union, write to:

National Credit Union Administration
Consumer Affairs Division
Washington, DC 20456

Complaints against all kinds of creditors can be referred to:

Department of Justice
Civil Rights Division
Washington, DC 20530

If you have truly suffered from credit discrimination, you should definitely write the appropriate agency so that others will not suffer in the same way.