The Equal Credit Opportunity Act prohibits lenders from discriminating against individuals based on their race, color, religion, national origin, age, sex, or marital status when they apply for credit. This law applies to every aspect of the credit process.
The Equal Credit Opportunity Act (ECOA) is a federal law that prohibits creditors from engaging in discriminatory practices against credit applicants based on specific characteristics. These characteristics encompass race, color, religion, national origin, age, sex, and marital status. For instance, it is unlawful for a creditor to deny a loan to an individual solely because of their race or religion. Additionally, they cannot impose a higher interest rate on someone based on their age or sex. The ECOA applies to all aspects of a credit transaction, including applying for credit, qualifying for credit, setting the terms of credit, and collecting on a debt. The primary objective of the ECOA is to ensure that every individual has equal access to credit and is not subjected to unfair discrimination based on certain characteristics.
The Equal Credit Opportunity Act is a federal law that prohibits lenders from discriminating against credit applicants based on factors such as race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.
The ECOA applies to all creditors, including banks, credit unions, mortgage lenders, finance companies, and retailers who regularly extend credit.
The ECOA covers most types of credit transactions, including loans, credit cards, mortgages, and lines of credit.
No, a lender cannot ask about your marital status or plans to have children. These questions are considered discriminatory under the ECOA.
No, a lender cannot deny you credit solely based on your age. However, they can consider factors such as income, credit history, and debt-to-income ratio when making a lending decision.
No, a lender cannot charge you a higher interest rate based on your race or national origin. This would be considered discriminatory under the ECOA.
No, a lender cannot require you to provide information about your spouse’s income unless you are applying for joint credit or live in a community property state.
No, a lender cannot ask about your disability or medical condition. These questions are considered discriminatory under the ECOA.
No, a lender cannot deny you credit solely based on the fact that you receive public assistance. They must consider other factors such as income and credit history.
If you believe a lender has violated the ECOA, you should file a complaint with the Consumer Financial Protection Bureau (CFPB) or consult with an attorney specializing in consumer protection laws.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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