The bureau of consumer financial protection bureau is proposing to amend regulation b, which implements the equal credit opportunity act ecoa, and the official interpretation to the regulation, which interprets the requirements of regulation b. The federal equal credit opportunity act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age provided the applicant has the capacity to enter into a binding contract. Congress is now enacting changes, which may or may not force you. And theres the equal credit opportunity act, designed to protect your from lender discrimination when you. The equal credit opportunity act and regulation b 7 sample the following is a list of business areas within banks that are likely to be affected by the requirements and restrictions of ecoa and regulation b. Cfpb20170009 rin 3170aa65 amendments to equal credit opportunity act regulation b ethnicity and race. Reizenstein, a fresh look at the equal credit opportunity act, 14 akron. Equal credit opportunity act appraisals regulation b.
The equal credit opportunity act department of justice. All about the equal credit opportunity act human rights. This act may be cited as the equal opportunity act. The equal credit opportunity act is a critical law that impacts all creditors including auto dealers. The equal credit opportunity act ecoa is a federal law that prohibits credit. Mar 28, 2018 the equal credit opportunity act ecoa is a regulation created by the u. The law protects consumers when they apply for financing with any creditor who regularly extends credit, including banks, finance companies, retail and department stores, credit.
In accordance with the memorandum of understanding that the commission and the cfpb entered into in january 2012 and reauthorized in 2015 and again in 2019, and consistent with the doddfrank act, the. The ecoa forbids credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or whether you receive income from a. The equal credit opportunity act ecoa, which is implemented by regulation b, applies to all creditors. The doddfrank wall street reform and consumer protection act of 2010 doddfrank act transferred this authority to the. Does the equal credit opportunity act apply to spousal. Cfpb equal credit opportunity act regulation b ethnicity and race information collection final rule published oct. The american opportunity tax credit aotc is a credit for qualified education expenses paid for an eligible student for the first four years of higher education. Title viiequal credit opportunity act department of justice. Jun 14, 2016 equal credit opportunity act the equal credit opportunity act visit for all of chapter. It was passed back in 1974, when credit scoring was in its early stages and lending decisions were still arguably susceptible to a loan officers personal judgments and prejudices, per a 2012 paper written by dubravka. Equal credit opportunity act federal trade commission.
Cfpb finalizes amendments to equal credit opportunity act. Except as provided in paragraph 2, the privilege provided for in section 704a of the equal credit opportunity act 15 u. This act title vii of the consumer credit protection act prohibits discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good faith exercise of any rights under the consumer credit protection act. The amendments made by the equal credit opportunity act amendments of 1976 enacting section 1691f of this title, amending this section and sections 1691b, 1691c, 1691d, and 1691e of this title, repealing section 1609 of this title, enacting provisions set out as notes under this section, and repealing provisions set out as a note under this section shall take effect on the date of enactment thereof mar. Lending equal credit opportunity act fdic consumer compliance examination manual september 2015 v7. Equal credit opportunity act financial definition of equal. Your equal credit opportunity rights consumer information.
More recently in 2015, the court in texas department of housing. Federal register equal credit opportunity act regulation. Equal credit opportunity regulation b background the equal credit opportunity act ecoa of 1974, which is implemented by the boards regulation b, applies to all creditors. Pdf theory and evidence of the impact of equal credit. The federal trade commission ftc, the nations consumer protection agency, enforces the equal credit opportunity act ecoa, which prohibits credit discrimination on the basis of race, color, religion. The bureaus equal credit opportunity act and regulation b. The equal credit opportunity act ecoa is a united states law codified at 15 u. The red flag rule uses the equal credit opportunity act s ecoa definition of creditor which states that a creditor is any entity that regularly extends, renews, or continues credit. We are required to disclose to you that you need not. The law protects consumers when they apply for financing with any creditor who regularly extends credit, including banks, finance companies, retail and department stores, credit card companies, and credit unions. Amends the equal credit opportunity act to expand the categories of prohibited discrimination when extending credit to include discrimination on account of sexual orientation or gender identity. Supreme court of the united states granted certiorari on march 2, 2015 and. Creditors cannot accept or deny an application based on race, color, religion, national origin, sex, marital status, age, or because you receive public assistance.
Regulation b implements the equal credit opportunity act ecoa and, in part, prohibits a creditor from inquiring about the race, color, religion, national origin, or sex of a credit applicant except under certain circumstances. Prohibits lenders from discriminating against credit applicants, establishes guidelines for gathering and evaluating credit information, and requires written notification when credit is denied. Nov 08, 2017 the equal credit opportunity act ecoa, 15 u. American opportunity tax credit internal revenue service. Equal credit opportunity they may use moreobjective, statistically devel oped techniques such as credit scoring. The cfpb finalized amendments to equal credit opportunity act regulations to provide additional flexibility for mortgage lenders in the collection. When originally enacted, ecoa gave the federal reserve board responsibility for prescribing the implementing regulation. Cfpb consumer laws and regulations ecoa cfpb june 20 ecoa 1 equal credit opportunity act ecoa the equal credit opportunity act ecoa, which is implemented by regulation b, applies to all creditors. The fair credit reporting act, for instance, helps ensure your credit reports are accurate, while the fair debt collection practices act is meant to protect you when a debt collector comes calling. Different banks may identify these areas differently, but the. Fair lending compliance resources national credit union. Equal credit opportunity act the federal equal credit opportunity act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age provided the applicant has the capacity to enter into a binding contract. The equal credit opportunity act foundations of law and society. The report also includes information about dojs lending work under the fair housing act fha, 42 u.
Different banks may identify these areas differently, but the functions should be clear from the names used here. Dec 05, 2014 created using powtoon free sign up at create animated videos and animated presentations for free. Fdic consumer compliance examination manual september 2015. The equal credit opportunity act visit for all of chapter. Equal credit opportunity act ecoa thompson consumer law. The equal credit opportunity act ecoa is a regulation created by the u. If the credit brings the amount of tax you owe to zero, you can have 40 percent of any remaining amount of the. The federal reserve board of governors in washington dc. Although the fair lending procedures are addressed under a separate section of the. Oftentimes, a trade creditor extending credit to its customer will require additional security in the form of a guaranty of its customers obligations. Apr 14, 2017 the equal credit opportunity act, or ecoa, is intended to give everyone in america a fair chance at obtaining a loan. Under the equal credit opportunity act ecoa and its implementing regulation b, creditors are required to notify an applicant of action taken within 30 days. Pdf as amended in 1976, the equal credit opportunity act ecoa outlawed discrimination in granting credit on the basis of race, color, religion.
The equal credit opportunity act ecoa prohibits discrimination in any aspect of a credit transaction. The statute requires finan cial institutions and other firms engaged in the extension of credit to make credit equally available. Equal credit opportunity act ecoa examination procedures. The federal agency that administers compliance with the laws concerning this creditor is the federal trade commission, equal credit opportunity, washington, dc 20580. It applies to any extension of credit, including extensions of credit to small businesses, corporations, partnerships.
People use credit to pay for education or a house, a remodeling job or a car, or to finance a loan to keep their business operating. The ecoa requires banks, credit card companies and anyone else involved in lending to make credit equally available to all creditworthy customers. The equal credit opportunity act states that individuals cannot be discriminated. Executive summary of the equal credit opportunity act. Sep 20, 2017 the cfpb finalized amendments to equal credit opportunity act regulations to provide additional flexibility for mortgage lenders in the collection of consumer ethnicity and race information.
Equal credit opportunity act protects credit applications. The equal credit opportunity act ecoa ensures that all consumers are given an equal chance to obtain credit. Underneath this law credit discrimination is forbidden. It prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age or because a person receives public. Equal credit opportunity act ecoa overview national. The ecoa evolved from consumer credit, but now provisions of the act also affect business credit grantors.
Compliance with the equal employment opportunity plan eeop requirements the federal regulations implementing the omnibus crime control and safe streets act safe streets act of 1968, as amended, require some recipients of financial assistance from the. Created using powtoon free sign up at create animated videos and animated presentations for free. A creditor considering obtaining a spousal guarantee must contend with the requirements of the equal credit opportunity act. Regulation b implements the equal credit opportunity act ecoa and, in part, prohibits a creditor from inquiring about the race, color, religion, national origin or sex of a credit applicant except under certain circumstances. Feb 21, 2017 equal credit opportunity act successes of the new era in civil rights at usda in april 2009, secretary vilsack called for a new era in civil rights and directed the office of the assistant secretary for civil rights oascr to help lead a comprehensive effort to improve usda s record. It applies to any extension of required by court or an enforcement agencycredit, including extensions of credit to small businesses, corporations, partnerships, and trusts. The equal credit opportunity act, or ecoa, is intended to give everyone in america a fair chance at obtaining a loan. This regulation is issued by the board of governors of the federal reserve system pursuant to title vii equal credit opportunity act of the consumer credit protection act, as amended 15 u. Mar 04, 2020 the american opportunity tax credit aotc is a credit for qualified education expenses paid for an eligible student for the first four years of higher education. In this paper, i will first introduce the related history, intent, and content of the equal credit opportunity act ecoa, and then present its political background and implementation. Car dealer equal credit opportunity act ecoa compliance. Dec 09, 2016 in this paper, i will first introduce the related history, intent, and content of the equal credit opportunity act ecoa, and then present its political background and implementation.
Two federal laws, the equal credit opportunity act ecoa and the fair housing act fha, offer protections against discrimination. Currently, such discrimination in credit is prohibited only on the basis of race, color, religion. A creditor considering obtaining a spousal guarantee must contend with the requirements of the equal credit opportunity act ecoa and its accompanying regulation b. The equal credit opportunity act ecoa is a federal civil rights law that protects against discrimination based on a prohibited basis, including race, color, religion, national origin, sex, marital status, age, receipt of public assistance income, and exercising rights under the consumer credit pr otection act. Other federal agencies have general regulatory authority over certain types of lenders and they monitor creditors for their compliance with ecoa. Regulation c, published in october of 2015 2015 hmda final rule. Every company that grants credit must conform to the equal credit opportunity act. The federal trade commission is the agency that enforces the equal credit opportunity act. The amendments made by the equal credit opportunity act amendments of 1976 enacting section 1691f of this title, amending this section and sections 1691b, 1691c, 1691d, and 1691e of this title, repealing section 1609 of this title, enacting provisions set out as notes under this section, and repealing provisions set out as a note under this. Regulation b implements the equal credit opportunity act ecoa and, in part. The ecoa prohibits lenders and financial institutions from discriminating when making loans based on any legally protected criteria, including race, religion, age, sex, and more. Part 1002equal credit opportunity act regulation b sec.
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