What is the Equal Credit Opportunity Act?

The Equal Credit Opportunity Act (ECOA) is a federal law that was enacted in 1974 and is enforced by the Federal Trade Commission. This law makes it illegal for creditors to discriminate against potential buyers based on factors such as race, national origin, or sex. It also ensures that credit-related decisions are based on a person’s credit history. The ECOA applies to all people in all states. The law requires creditors to inform people of the action taken on their credit application, whether the application is accepted or denied. If a lender denies an application, the law requires them to provide the person with a notice that explains the reason for the denial. This allows for people to know what criteria lenders are using to decide who is granted access to credit. The ECOA also prohibits creditors from asking questions about marital status or age. It also prohibits them from requiring a person to have a cosigner. Additionally, the law requires creditors to make an effort to supply credit to people who have limited or no credit history. Overall, the ECOA ensures that all people, regardless of their race, national origin, sex, marital status, or age, have equal access to credit. This protects people’s rights and provides them with a fair opportunity to access the credit they need.

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What is the Equal Credit Opportunity Act?

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