The regulation prohibits creditor practices that discriminate on the basis of any of these factors. The purpose of this regulation 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) to the fact that all or part of the applicant's income derives from a public assistance program or to the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act. Incentives for self-testing and self-correction.ĭata collection for credit applications by women-owned, minority-owned, or small businesses. Rules concerning evaluation of applications. Rules concerning requests for information. Limited exceptions for certain classes of transactions. The act provides for up to $10,000 in punitive damages for individual lawsuits and the lesser of $500,000 or 1 percent of the credit's net worth for class action suits.Equal Credit Opportunity Act (Regulation B) The ECOA established penalties for failure to comply with the regulations. Creditors must also provide an account holder with a reason for closing an account, refusing to extend credit, or making changes in the terms of credit. If the application is denied, the creditor must inform the applicant of the reason for the denial. The ECOA requires that creditors inform an applicant within 30 days whether his or her credit application has been accepted or denied. Creditors may, however, ask about the ages and financial obligations of the applicant's existing children. In addition to prohibiting discrimination on the basis of marital status, the act prohibits creditors from asking the marital status of an applicant (unless the application is for joint credit) or whether the applicant plans to have children.
The act was signed into law by President Gerald Ford on October 28. The House approved the amended version in a vote of 355-1 on October 9, and Senate approved the bill in a voice vote on October 10. The committee returned an amended bill to both chambers. The amended version went to a conference committee.
The measure was then referred to the United States Senate, which passed an amended version on June 13 in a vote of 89-0. The measure passed on Februin a vote of 282-94. The act was introduced to the United States House of Representatives on October 31, 1973. The Equal Credit Opportunity Act (ECOA) is part of an amendment to the Federal Deposit Insurance Act, originally enacted in 1950.
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