The Roper Law Firm

EQUAL CREDIT OPPORTUNITY ACT (ECOA)

People apply for and use credit every day in the United States to pay for an education, a house, an automobile or recreational vehicle, a remodeling job or a car, to finance a loan to keep their business operating, or a host of other reasons.

A Federal Law known as the Equal Credit Opportunity Act (ECOA) protects individuals and groups from unlawful credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because you get public assistance. While creditors may ask you for most of this information in certain situations, they may not use it when deciding whether to give you credit or when setting the terms of your credit.

The law provides protections when you deal with any organizations or people who regularly extend credit, including banks, small loan and finance companies, retail and department stores, credit card companies, and credit unions. Everyone who participates in the decision to grant credit or in setting the terms of that credit, including real estate brokers who arrange financing, must comply with the Equal Credit Opportunity Act (ECOA).

When you apply for credit, creditors may not:

  • Discourage you from applying or reject your application because of your race, color, religion, national origin, sex, marital status, age, or because you receive public assistance.
  • Consider your race, sex, or national origin, although you may be asked to disclose this information if you want to. It helps federal agencies enforce anti-discrimination laws. A creditor may consider your immigration status and whether you have the right to stay in the country long enough to repay the debt.
  • Impose different terms or conditions, like a higher interest rate or higher fees, on a loan based on your race, color, religion, national origin, sex, marital status, age, or because you receive public assistance.
  • Ask if you’re widowed or divorced. A creditor may use only 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 “community property” states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. A creditor in any state may ask for this information if you apply for a joint account or one secured by property.
  • Ask for information about your spouse, except:
    • if your spouse is applying with you;
    • if your spouse will be allowed to use the account;
    • if you are relying on your spouse’s income or on alimony or child support income from a former spouse;
    • if you live in a community property state.
  • Ask about your plans for having or raising children, but they can ask questions about expenses related to your dependents.
  • Ask if you get alimony, child support, or separate maintenance payments, unless they tell you first that you don’t have to provide this information if you aren’t relying on these payments to get credit. A creditor may ask if you have to pay alimony, child support, or separate maintenance payments

The agency that enforces the Equal Credit Opportunity Act (ECOA) is The Federal Trade Commission (FTC).

BE AWARE THAT A LENDER THAT REJECTED YOU FOR AN EXTENSION OF CREDIT MUST SEND YOU A NOTICE TELLING YOU WHAT THEY CONSIDERED WHEN DOING SO. IF THEY DON’T THEN YOU MAY NE ENTITLED TO DAMAGES. THIS AREA OVERLAPS WITH THE FAIR CREDIT REPORTING ACT AND IT ALSO PROVIDES PROOF THAT, FOR EXAMPLE, AN AUTO DEALER SOUGHT CREDIT FOR YOU FROM THE SOURCES THEY TOLD YOU THEY DID.

If you have been the victim of Equal Credit Opportunity Act violations, find out what your legal rights are by contacting The Roper Law Firm  at 706.596.5353.