What is the Equal Credit Opportunity Act?

The Equal Credit Opportunity Act (ECOA) is a federal law that protects consumers from discrimination when applying for credit. It was passed in 1974 to ensure that all consumers have access to credit, regardless of race, sex, marital status, or age. It prohibits creditors from asking about or considering any of these protected characteristics when making a credit decision. The ECOA applies to all creditors—banks, insurance companies, stores, and credit unions—when they offer or extend credit. It applies to all consumer credit transactions, such as credit cards, home loans, and student loans. The ECOA also requires lenders to advertise credit equally and provide certain disclosures with loan applications. For instance, if a lender requires a security deposit, they must disclose the amount and the basis for the security deposit. They must also provide consumers with a copy of their credit report, if requested. The ECOA strictly prohibits lenders from discriminating against applicants, both in the application process and when offering credit terms. This includes denying consumers credit, offering a higher interest rate, or applying a more stringent qualification process on the basis of race, sex, age, or marital status. The ECOA is enforced by the Federal Trade Commission (FTC) and regulated federally and at the state level in Oregon. Consumers have the right to file a complaint with the FTC or the Oregon Division of Finance and Corporate Securities if they believe they have been discriminated against in a credit transaction.

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What is the Equal Credit Opportunity Act?

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