Equal Credit Opportunity Act (ECOA)

The Equal Credit Opportunity Act (ECOA) ensures that all consumers are given an equal chance to obtain credit. This doesn't mean all consumers who apply for credit get it. Factors such as income, expenses, debt, and credit history are considerations for creditworthiness.

The law protects you when you deal with any creditor who regularly extends 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 ECOA.

While You Apply For Credit, Creditors May Not:

• Deter you from applying or reject your application due to your race, color, religion, national origin, sex, marital status, age, or because you receive public assistance.
• Take into account your race, sex, or national origin, although you may be asked to divulge this data if you wish to. It helps federal agencies enforce anti-discrimination laws. A creditor might 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 can only use the terms: married, unmarried, or separated.
• Inquire about your marital status if you're applying for a separate, unsecured account. A creditor may ask you to furnish this data if you live in "community property" states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. A creditor in any state may request for this information if you ask for a joint account or one secured by property.
• Request for data regarding your spouse, except
  • if your spouse is applying with you;
  • if your spouse will be permitted to utilize the account;
  • if you are relying on your spouse's income or on alimony or child support income from a former spouse;
  • if you reside in a community property state.
• Inquire about your plans for having or bringing up children, but they can pose questions about expenses related to your dependents.
• Ask if you receive alimony, child support, or separate maintenance payments, unless they inform you first that you don't have to furnish this information if you aren't relying on these payments to acquire credit. A creditor may ask if you have to pay alimony, child support, or separate maintenance payments.

When Choosing To Extend You Credit Or While Setting The Terms Of Credit, Creditors May Not:

• Regard your race, color, religion, national origin, sex, marital status or whether you get public assistance.

  Take into account your age, unless:

  • you're too young to sign contracts, generally under 18;
  • you're at least 62, and the creditor will favor you because of your age;
  • it's used to determine the meaning of other factors important to creditworthiness. For example, a creditor could use your age to determine if your income might drop because you're about to retire;
  • it's used in a valid credit scoring system that favors applicants 62 and older. A credit scoring system assigns points to answers you give on credit applications. For example, your length of employment might be scored differently depending on your age.

• Consider whether you have a telephone account in your name. A creditor may take into account whether you have a phone.
• Think about the racial composition of the neighborhood where you want to buy, refinance or improve a house with money you are borrowing.

While Assessing Your Income, Creditors May Not:

• Refuse to consider reliable public assistance income the same way as other income.
• Reduce income because of your sex or marital status. For example, a creditor cannot count a man's salary at 100 percent and a woman's at 75 percent. A creditor may not assume a woman of childbearing age will stop working to raise children.
• Discount or refuse to regard income since it comes from part-time employment, Social Security, pensions, or annuities.
• Refuse to consider reliable alimony, child support, or separate maintenance payments. A creditor may ask you for proof that you receive this income consistently.

You Also Have The Right To:

• Hold credit in your birth name (Lisa Smith), your first and your spouse's last name (Lisa Jones), or your first name and a combined last name (Lisa Smith Jones).
• Obtain credit without a cosigner, if you meet the creditor's standards.
• Have a cosigner other than your spouse, if one is necessary.
• Maintain your own accounts after you change your name, marital status, reach a certain age, or retire, unless the creditor has evidence that you're not willing or able to pay.
• Understand whether your application was accepted or rejected within 30 days of filing a complete application.
• Know why your application was rejected. The creditor must tell you the specific reason for the rejection or that you are entitled to learn the reason if you ask within 60 days.
• Find out the specific reason you were offered less favorable terms than you applied for, but only if you reject these terms.
• Learn why your account was closed or why the terms of the account were made less favorable, unless the account was inactive or you failed to make payments as agreed.

Take action if you feel a creditor has discriminated against you.

Contact Information

For retail and department stores; mortgage, small loan and consumer finance companies; oil companies; public utilities; state credit unions; government lending programs; or travel and expense credit card companies are involved, contact:

Federal Trade Commission
Consumer Response Center
Washington, DC 20580
1-877-FTC-HELP (1-877-382-4357); TDD: 1-866-653-4261
www.ftc.gov

The FTC generally does not intervene in individual disputes, but the information you provide may indicate a pattern of violations that the Commission would investigate.

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