The Equal Credit Opportunity Act (ECOA) is a United States law (codified at et seq.), enacted October 28, 1974, that makes it unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction, on the basis of race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract); the applicant's use of a public assistance program to receive all or part of their income; or the applicant's previous good-faith exercise of any right under the Consumer Credit Protection Act. The law applies to any person who, in the ordinary course of business, regularly participates in a credit decision, including banks, retailers, bankcard companies, finance companies, and credit unions. The part of the law that defines its authority and scope is known as Regulation B, from the (b) that appears in Title 12 part 1002's official identifier: 12 C.F.R. § 1002.1(b) (2017). Failure to comply with Regulation B can subject a financial institution to civil liability for actual and punitive damages in individual or class actions. Liability for punitive damages can be as much as $10,000 in individual actions and the lesser of $500,000 or 1% of the creditor's net worth in class actions. Before the enactment of the law, lenders and the federal government frequently and explicitly discriminated against female loan applicants and held female applicants to different standards from male applicants. A large coalition of women's and civil rights groups pressured the government to pass the ECOA (and the Housing and Community Development Act of 1974) to prohibit such discrimination.

Background

As a legislative fellow with Senator Bill Brock of Tennessee, Dr. Emily Card was motivated by her own experience in being denied a credit card and home mortgage. This led her to work on legislation prohibiting discrimination in granting credit to women. Her work and coordination with women's organizations such as the National Organization of Women generated a report on gender-based discrimination in the banking industry that was supported by thousands of letters from women throughout the United States who had been denied credit.

Prohibitions

Among other things, the ECOA states that it is illegal for creditors to:

Requirements

The ECOA states that creditors must:

Scope additions

When the Banking committee marked up the ECOA, congresswoman Lindy Boggs added the provision banning discrimination due to sex or marital status without informing the other members of the committee beforehand, personally inserting the language on her own and photocopying new versions of the bill. She then told the other committee members, "Knowing the members composing this committee as well as I do, I'm sure it was just an oversight that we didn't have 'sex' or 'marital status' included. I've taken care of that, and I trust it meets with the committee's approval." The committee unanimously approved the bill.