The Equal Credit Opportunity Act (ECOA) is a United States law (codified on 15 USC Ã,§ 1691 et seq.), Promulgated October 28, 1974, which makes it unlawful for any creditor to discriminate against any applicant, in respect of any aspect of credit transactions, on the basis of race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to enter into contract); for the fact that all or part of the income of the applicant is from a public assistance program; or to the fact that the applicant has good faith exercising any rights under the Consumer Credit Protection Act. This law applies to anyone who, in ordinary business activity, regularly participates in credit decisions, including banks, retailers, credit card companies, finance companies, and credit unions.
The portion of the law that defines the authority and scope of it is known as Rule B , of (b) which appears in Title 12 section 1002 of the official identifier: 12 C.F.R. Ã,§ 1002.1 (b) (2017). Failure to comply with Regulation B may cause financial institutions to be civil liability for actual and punitive damages in the actions of individuals or classes. The liability for punitive damages can amount to $ 10,000 in individual actions and lower $ 500,000 or 1% of the net worth of creditors in class actions.
Video Equal Credit Opportunity Act
Prohibition
Among other things, ECOA states that it is illegal for creditors to:
- Discrimination based on race, gender, age, national origin, or marital status, or because a person receives public assistance.
- Ask about marital status if a candidate is applying for an unsecured separate credit, with one exception: one can be asked about marital status if one lives in a country of community ownership. No matter what their dominant status, the combined credit (credit is shared by a married couple) or credit secured by the property is exempt from this.
- Ask candidates whether they plan to have additional children or children, but creditors may inquire about the amount, age, and financial obligations associated with all children.
- Do not ban regular revenue sources, such as reliable veteran allowances, welfare payments, Social Security payments, benefits, child support, etc. Nor should they refuse to consider or discount any income earned from part-time employment, pensions, benefits, or pension benefits programs.
Maps Equal Credit Opportunity Act
Requirements
ECOA states that the creditor must:
- Inform candidates if they have been denied or granted credits within 30 days of receiving their completed application. This can be done verbally, but should be done in writing.
- Give specific reasons (or let candidates know how to get a reason) why someone was denied credit or granted credits in a way different from the one originally applied. The same rule applies if the creditor closes the account, refuses to increase the credit limit, makes a negative change in the credit terms and does not make the same changes to other consumers, or refuses to give credit at the same time, or more similarly, the terms as credit was initially applied.
Increase coverage
When the Banking committee marks the ECOA, congressman Lindy Boggs adds a provision that prohibits discrimination due to sex or marital status without notifying other committee members beforehand, personally entering the language itself and photocopying a new version of the bill. He then told the other members of the committee, "Knowing the members compose this committee as well as I do, I'm sure it's just an oversight that we have no 'sex' or 'marital status' included I have taken care of it, and I believe it meet with the approval of the committee. "The committee unanimously approved the bill.
References
Further reading
- "Your Equal Credit Opportunity Option". Consumer Information . US Federal Trade Commission. January 2003 . Retrieved April 6 2018 .
External links
- Annual Report to Congress on Equal Credit Opportunity Law - This annual report by the Board of Governors of the Federal Reserve System discusses actions taken in response to the Equal Credit Opportunity Act.
- Public Law 93-495, 93rd Congress, HR 11221: An Act To Increase Deposit Insurance From $ 20,000 To $ 40,000, To Provide Full Insurance For A $ 100,000 Per Unit Deposit, To Establish A National Commission On Electronic Funds Transfer, And For Other Purposes; The same Credit Opportunity Law; Fair Credit Billing Act
Source of the article : Wikipedia
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