What is Consumer Credit discrimination?
What is credit discrimination? The Equal Credit Opportunity Act makes it illegal for a creditor to discriminate in any aspect of credit transaction based on certain characteristics. In addition, the Fair Housing Act makes many discrimination practices in home financing illegal.
What is the ECOA rule?
The Equal Credit Opportunity Act (ECOA), enacted in 1974, and its implementing rules (known as Regulation B) prohibit creditors from discriminating on the basis of race, color, religion, national origin, sex, marital status, age (provided that the applicant has the capacity to contract), because all or part of an …
What is credit discrimination?
What is credit and lending discrimination? Credit and lending discrimination occurs when a lender allows protected traits, such as race, color or sexual orientation, to influence its decision to offer you credit or a loan.
What was the main purpose of ECOA?
The purpose of ECOA is to promote the availability of credit to all creditworthy applicants without regard to race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract); because all or part of the applicant’s income derives from any public assistance …
What do fair lending and anti discrimination laws apply to?
These fair lending laws prohibit lenders from discriminating in credit transactions on the basis of race, color, national origin, religion, sex, and other specified grounds.
What are the two primary fair lending laws?
The federal fair lending laws—the Equal Credit Opportunity Act and the Fair Housing Act—prohibit discrimination in credit transactions, including transactions related to residential real estate.
What is an ECOA violation?
It prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age or because a person receives public assistance in whole or in part. It also makes it unlawful to discriminate against anyone who has exercised any rights under the Consumer Credit Protection Act.
What is an example of discrimination in lending?
Examples of Lending Discrimination Providing a different customer service experience to mortgage applicants depending on their race, color, religion, sex, familial status, national origin or disability. Refusing to consider a mortgage applicant’s disability-related income, such as SSI or SSDI.
Who affects ECOA?
The law applies to any organization that extends credit, including banks, small loan and finance companies, retail and department stores, credit card companies, and credit unions. It also applies to anyone involved in the decision to grant credit or set its terms—for example, real estate brokers who arrange financing.