The act was finally passed in 1974, originally just prohibiting discrimination based on marital status or sex. Organizations claimed that single women were the least likely applicants to be granted credit at the time. At the time, mortgage lenders would not take into account a married woman’s income when considering loan or credit eligibility, especially if the female applicant was of childbearing age. The ECOA was originally passed when limits against women applying for credit were challenged. Lenders may ask questions-with answers being optional-about some of the ECOA criteria listed above, which is legal as long as the answers are not used in any discriminatory way. The ECOA was amended as recently as March 2021, to clarify that discrimination on the basis of sex includes gender identity discrimination. If a pattern of such discrimination with home improvement or mortgage loans is reported within an organization, the Department of Justice can file a claim under both the ECOA and the Fair Housing Act. The ECOA extends its bounds to all lending organizations or anyone determining eligibility of credit including, banks, retail enterprises, credit unions, credit card companies, and loan and finance companies. The ECOA can be applied to the following types of consumer loans:īeyond that, the ECOA also covers small business loans and lines of credit established for corporations, trusts, and partnerships. The Equal Credit Opportunity Act (ECOA) is a federal civil rights law that prevents creditors and lenders from determining applicant eligibility based upon the following criteria. The Department of Justice can also file a lawsuit against the creditor if a pattern of violating this act is established.
If this act is considered to have been violated when a creditor charges higher costs to certain applicants or denies applications for any of the reasons listed above, the applicant can file a lawsuit or a complaint with the Department of Housing and Urban Development (HUD). Exercising rights under consumer protection laws.The Equal Credit Opportunity Act (ECOA) is a federal civil rights law that prevents creditors and lenders from determining applicant eligibility based upon the following criteria:
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