EQUAL CREDIT OPPORTUNITY: UNDERSTANDING YOUR RIGHTS UNDER THE LAW
I have applied for credit. What if I believe a creditor is discriminating against me?
What credit transactions are subject to the anti- discrimination prohibitions in the ECOA?
Am I protected under the ECOA?
What creditors are subject to ECOA?
What constitutes “discrimination” under the ECOA and Nevada law?
What questions are creditors prohibited from asking me when I apply for credit?
Do creditors have to tell me whether my application was accepted or rejected?
Do creditors have to tell me why my application was rejected?
What do I do if I suspect a creditor has discriminated against me?
Which agency do I contact to report a creditor for violating the ECOA?
I have applied for credit. What if I believe a creditor is discriminating against me? Are there any laws that protect me?
Under the Equal Credit Opportunity Act (ECOA), creditors cannot discriminate in the granting of credit on the basis of race, color, religion, national origin, sex, marital status, age, or because your income is from public assistance or because you have in good faith exercised any right under the Consumer Credit Protection Act.
Nevada law also prohibits discrimination against any applicant on the basis of the applicant's sex or marital status with respect to any aspect of a credit transaction.
The Fair Housing Act (FHA) prohibits discrimination on the basis of race, color, religion, national origin, sex, familial status, and handicap in residential real estate-related transactions. Residential real estate-related transactions include mortgages, home equity and home improvement loans.
What credit transactions are subject to the anti- discrimination prohibitions in the ECOA?
“Credit transactions” are very broadly defined in the ECOA. Any decision by a creditor to postpone or defer the payment of a debt, or incur and defer additional debt is subject to the ECOA. Also, any purchase or service in which payment is deferred is subject to the anti-discrimination prohibitions in the ECOA. Examples of the last category include medical bills, bills from repair people and other workers. The ECOA also excludes certain types of “incidental credit” transactions from many of its requirements.
Am I protected under the ECOA?
Only “applicants” are protected under most of the ECOA provisions. An “applicant” is “any person who applies to a creditor directly for an extension, renewal, or continuation of credit.” An “applicant” is also defined as, “someone who applies to a creditor indirectly by use of an existing credit plan for an amount exceeding a previously established credit limit.” Also, by regulation, people who would be contractually liable for an extension of credit are protected by the ECOA.
What creditors are subject to the requirements of the ECOA?
Under the ECOA, any person who regularly extends, renews, or continues credit is subject to the requirements of the ECOA. Also, any person who regularly arranges for the extension, renewal, or continuation of credit is subject to the ECOA’s requirements. Lastly, any assignee of an original creditor who participates in the decision to extend, renew, or continue credit is subject to the ECOA. By regulation, in order for any person to be subject to the requirements of the ECOA they must participate in the credit decision, including setting the terms of the credit.
For instance, a credit card company is a “creditor” under the Act, but a gas station that accepts payment by credit card is not.
What constitutes “discrimination” under the ECOA and Nevada law?
Creditors cannot impose different terms or conditions, like a higher interest rate or higher fees on a loan because of your race, color, religion, national origin, sex, marital status, age or because you receive public assistance.
Creditors also may not discourage you from applying for credit because of your race, color, religion, national origin, sex, marital status, age, or because you receive public assistance.
Creditors cannot consider your race, sex, or national origin, although you may be asked to disclose this information if you want to. This helps federal agencies enforce the anti-discrimination laws.
Creditors cannot discount income because of your sex or marital status.
Creditors cannot discount or refuse to consider income because it comes from part-time employment, Social Security, pensions, or annuities.
Creditors also cannot refuse to consider reliable alimony, child support, or separate maintenance payments. A creditor may ask for proof that this income is received consistently.
Creditors can consider your age if you are too young to sign contracts or if you’re at least 62 and the creditor will favor you because of your age. They also can consider your age if it is used to determine 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.
What questions are creditors prohibited from asking me when I apply for credit?
Creditors cannot ask if you’re widowed or divorced. They may only use the terms married, unmarried, or separated.
In Nevada, creditors can ask about your spouse and marital status because Nevada is a community property state.
Creditors cant ask about your plans for having or raising children, but they can ask questions about expenses related to your dependents.
Creditors also can’t ask if you get alimony, child support, or separate maintenance payments, unless they tell you first that you don’t have to provide this information if you aren’t relying on these payments to get credit.
Do creditors have to tell me whether my application was accepted or rejected?
Yes. You have the right to know whether your application was accepted or rejected within 30 days of filing a complete application.
Do creditors have to tell me why my application was rejected?
Yes. You also have the right to know why your application was rejected, why your account was closed, or why you were offered less favorable terms than you applied for if you reject those terms. 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. An acceptable reason might be: “you income was too low” or “you haven’t been employed long enough.” An unacceptable reason might be “you didn’t meet our minimum tandards.”
What do I do if I suspect a creditor has discriminated against me?
Consider suing the creditor in federal district court. if you win, you can recover your actual damages and be awarded punitive damages if the court finds that the creditor’s conduct was willful. You also may recover reasonable lawyers’ fees and court costs. Or you might consider finding others with the same claim, and getting together for a class action suit. An attorney can advise you on how to proceed.
Contact the federal agency responsible for enforcing the ECOA in your case. Which agency to contact depends on the type of financial institution you dealt with.
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 crecit card companies, contact:
Federal Trade Commission
Consumer Response Center
Washington, DC 20580
1-877-FTC-HELP
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.
For nationally-chartered banks (National or N.A. will be part of the name):
Comptroller of the Currency
Consumer Assistance Group
1301 McKinney Street
Houston, TX 77010-9050
1-800-613-6743
www.helpwithmybank.gov
For state-chartered banks insured by the Federal Deposit Insurance Corporation, but not members of the Federal Reserve System:
Federal Deposit Insurance Corporation
Consumer Response Center
2345 Grand Boulevard
Suite 100
Kansas City, MO 64108
1-877-275-3342
www.fdic.gov
For federally-chartered or federally insured savings and loans:
Office of Thrift Supervision
Consumer Affaris
1700 G Street NW
Washington, DC 20552
1-800-6929; TTY: 800-877-8339
www.ots.treas.gov
For federally-chartered credit unions:
National Credit Union Administration
1775 Duke Street
Suite 4206
Alexandria, VA 22314-3437
1-800-755-1030
www.ncua.gov
For State member banks fo the Federal Reserve System:
Federal Reserve Consumer Help Center
P.O. Box 1200
Minneapolis, MN 55480
1-888-851-1920; TDD: 877-766-8533
www.federalreserveconsumerhelp.gov
For discrimination complaints against all kinds of creditors:
Department of Justice
Civil Rights Division
Washington, DC 20530
www.usdoj.gov/crt
Still Not Sure Who to Contact?
If you cant figure out which agency has responsibility for the financial institution you dealt with, visit www.federalreserveconsumerhelp.gov or call 1-888-851-1920
NOTE: The information contained on this page is for general background information only. If you have a legal question, it is best to consult with an attorney.
