Equal Credit Opportunity Act

A law passed by Congress ensures that all consumers will be given an equal chance to receive credit. The Equal Credit Opportunity Act says it is illegal for creditors to discriminate against applicants on the basis of their sex, marital status, race, national origin, religion, age or because they get public assistance income. This doesn't mean all consumers who apply for credit will get it. Creditors can still use factors such as income, expense, debts, and credit history to judge applicants.

The law protects you when dealing with any creditor who regularly extends credit, including: banks, small loan and finance companies, retail and department stores, credit card companies, and credit unions. Anyone participating in the decision to grant credit, such as real estate brokers who arrange financing, is covered by the law. Businesses applying for credit are protected by the law, too.

When You Apply For Credit, A Creditor May Not.

• Discourage you from applying because of your sex, marital status, age, national origin, or because you receive public assistance income.

• Ask you to reveal your sex, race, national origin, or religion. A creditor may ask you to voluntarily disclose this information if you are applying for a real estate loan. This information helps federal agencies enforce anti-discrimination laws. A creditor may ask what your residence or immigration status is.

• Ask whether you are divorced or widowed.

• Ask what your marital status is if you are applying for a separate, unsecured account. A creditor may ask for this information if you apply for a joint account or any account secured by property.

• Ask you for information about your husband or wife. A creditor may ask about your spouse if: your spouse is applying with you; your spouse will be allowed to use the account; you are relying on your spouse's income or on alimony or child support income from a former spouse; or if you reside in a community property state.

• Ask about your plans for having or raising children.

• Ask if you receive alimony, child support, or separate maintenance payments. A creditor may ask for this information if you are first told that you don't have to reveal it if you won't rely on it to get credit. A creditor may ask if you have to pay alimony, child support, or separate maintenance payments.

When Deciding To Give You Credit, A Creditor May Not.

• Consider your sex, marital status, race, national origin, or religion.

• Consider whether you have a telephone listing in your name. A creditor may consider whether there is a phone in your home.

• Consider the race of the people who live in the neighborhood where you want to buy or improve a house with borrowed money.

• Consider your age, with certain exceptions:
  
  
  • If you are too young to sign contracts. Generally, this applies to those 18 and under.
  • If you are 62 or over, and the creditor will favor you because of your age.
  • If it is used to determine the meaning of other factors which are important to credit-worthiness.
  • If it is used in a scoring system which favors applicants age 62 and over. A credit-scoring system assigns different points to your answers to application questions.

When Evaluating Your Income, A Creditor May Not.

• Refuse to consider reliable public assistance income in same manner as other income.

• Discount income because of your sex or marital status.

• Discount or refuse to consider income because it is derived from part-time employment or from pension, annuity, or retirement benefit programs.

• Refuse to consider consistently-received alimony, child support, or separate maintenance payments. A creditor may ask you for proof that this income has been received consistently.

You Also Have The Right.

• To have credit in your birth name (Mary Smith), your first name and your spouse's last name (Mary Jones), or your first name and a combined last name (Mary Smith-Jones).

• To get credit without a co-signer, if you meet the creditor's standards.

• To have a co-signer other than your husband or wife, if one is necessary.

• To keep your own accounts after you change your name, marital status, reach a certain age, or retire, unless the creditor had evidence that you are unable or unwilling to pay.

• To know whether your application was accepted or rejected within 30 days of filing it.

• To know why your application was rejected.

What You Can Do If You Suspect Discrimination.

• Complain to the creditor.

• Check with your state's Attorney General's office to see if the creditor violated state laws.

• Bring a case in Federal district court.

• Join with others to file a class action suit.

• Report violations to the appropriate government agency. If you are denied credit, the creditor must give you the name and address of the agency to contact.

For more information contact the Federal Trade Commission.

The above information should be understood to be a general discussion of the subject matter and DOES NOT constitute a legal opinion about the situation. For further information please consult a qualified attorney.

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