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Equal Credit Opportunity...
Credit is used by millions of consumers to finance an education
or a house, remodel a home, or get a small business loan.
The Equal Credit Opportunity Act (ECOA) ensures that all
consumers are given an equal chance to obtain credit. This doesn’t
mean all consumers who apply for credit get it: Factors such as
income, expenses, debt, and credit history are considerations for
creditworthiness.
The law protects you when you deal with any creditor who
regularly extends credit, including banks, small loan and finance
companies, retail and department stores, credit card companies, and
credit unions. Anyone involved in granting credit, such as real
estate brokers who arrange financing, is covered by the law.
Businesses applying for credit also are protected by the law.
When You Apply For Credit, A Creditor May Not...
* Discourage you from applying because of your sex, marital
status, age, race, national origin, or because you receive public
assistance income.
* Ask you to reveal your sex, race, national origin, or religion. A
creditor may ask you to voluntarily disclose this information
(except for religion) if you’re applying for a real estate loan.
This information helps federal agencies enforce anti-discrimination
laws. You may be asked about your residence or immigration status.
* Ask if you’re widowed or divorced. When permitted to ask marital
status, a creditor may only use the terms: married, unmarried, or
separated.
* Ask about your marital status if you’re applying for a separate,
unsecured account. A creditor may ask you to provide this
information if you live in "community property" states: Arizona,
California, Idaho, Louisiana, Nevada, New Mexico, Texas, and
Washington. A creditor in any state may ask for this information if
you apply for a joint account or one secured by property.
* Request information about your spouse, except when your spouse is
applying with you; your spouse will be allowed to use the account;
you are relying on your spouse’s income or on alimony or child
support income from a former spouse; or if you reside in a community
property state.
* Inquire about your plans for having or raising children.
* Ask if you receive alimony, child support, or separate maintenance
payments, unless you’re first told that you don’t have to provide
this information if you won’t rely on these payments to get credit.
A creditor may ask if you have to pay alimony, child support, or
separate maintenance payments.
When Deciding To Give You Credit, A Creditor May Not...
* Consider your sex, marital status, race, national origin, or
religion.
* Consider whether you have a telephone listing in your name. A
creditor may consider whether you have a phone.
* Consider the race of people in the neighborhood where you want to
buy, refinance or improve a house with borrowed money.
* Consider your age, unless:
- you’re too young to sign contracts, generally younger than 18
years of age;
- you’re 62 or older, and the creditor will favor you because of
your age;
- it’s used to determine the meaning of 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;
- it’s used in a valid scoring system that favors applicants age 62
and older. A credit-scoring system assigns points to answers you
provide to credit application questions. For example, your length of
employment might be scored differently depending on your age.
When Evaluating Your Income, A Creditor May Not...
* Refuse to consider public assistance income the same way as other
income.
* Discount income because of your sex or marital status. For
example, a creditor cannot count a man’s salary at 100 percent and a
woman’s at 75 percent. A creditor may not assume a woman of
childbearing age will stop working to raise children.
* Discount or refuse to consider income because it comes from
part-time employment or pension, annuity, or retirement benefits
programs.
* Refuse to consider regular alimony, child support, or separate
maintenance payments. A creditor may ask you to prove you have
received this income consistently.
You Also Have The Right To...
* Have credit in your birth name (Mary Smith), your first and your
spouse’s last name (Mary Jones), or your first name and a combined
last name (Mary Smith-Jones).
* Get credit without a cosigner, if you meet the creditor’s
standards.
* Have a cosigner other than your husband or wife, if one is
necessary.
* Keep your own accounts after you change your name, marital status,
reach a certain age, or retire, unless the creditor has evidence
that you’re not willing or able to pay.
* Know whether your application was accepted or rejected within 30
days of filing a complete application.
* Know why your application was rejected. The creditor must give you
a notice that tells you either the specific reasons for your
rejection or your right to learn the reasons if you ask within 60
days.
* Acceptable reasons include: "Your income was low," or "You haven’t
been employed long enough." Unacceptable reasons are: "You didn’t
meet our minimum standards," or "You didn’t receive enough points on
our credit-scoring system." Indefinite and vague reasons are
illegal, so ask the creditor to be specific.
* Find out why you were offered less favorable terms than you
applied for—unless you accept the terms. Ask for details. Examples
of less favorable terms include higher finance charges or less money
than you requested.
* Find out why your account was closed or why the terms of the
account were made less favorable unless the account was inactive or
delinquent.
A Special Note To Women...
A good credit history—a record of how you paid past bills—often is
necessary to get credit. Unfortunately, this hurts many married,
separated, divorced, and widowed women. There are two common reasons
women don’t have credit histories in their own names: they lost
their credit histories when they married and changed their names; or
creditors reported accounts shared by married couples in the
husband’s name only.
If you’re married, divorced, separated, or widowed, contact your
local credit bureau(s) to make sure all relevant information is in a
file under your own name.
If You Suspect Discrimination...
* Complain to the creditor. Make it known you’re aware of the law.
The creditor may find an error or reverse the decision.
* Check with your state Attorney General to see if the creditor
violated state equal credit opportunity laws. Your state may decide
to prosecute the creditor.
* Bring a case in federal district court. If you win, you can
recover damages, including punative damages. You also can obtain
compensation for attorney’s fees and court costs. An attorney can
advise you on how to proceed.
* Join with others and file a class action suit. You may recover
punitive damages for the group of up to $500,000 or one percent of
the creditor’s net worth, whichever is less.
* Report violations to the appropriate government agency. If you’re
denied credit, the creditor must give you the name and address of
the agency to contact. While some of these agencies don’t resolve
individual complaints, the information you provide helps them decide
which companies to investigate. A list of agencies follows.
If a retail store, department store, small loan and finance
company, mortgage company, oil company, public utility, state credit
union, government lending program, or travel and expense credit card
company is involved, contact:
Consumer Response Center
Federal Trade Commission
Washington, DC 20580.
The FTC cannot intervene in individual disputes, but the
information you provide may indicate a pattern of possible law
violations that require action by the Commission.
If your complaint concerns a nationally-chartered bank (National
or N.A. will be part of the name), write to:
Comptroller of the Currency
Compliance Management
Mail Stop 7-5
Washington, DC 20219
If your complaint concerns a state-chartered bank that is insured
by the Federal Deposit Insurance Corporation but is not a member of
the Federal Reserve System, write to:
Federal Deposit Insurance Corporation
Consumer Affairs Division
Washington, DC 20429
If your complaint concerns a federally-chartered or
federally-insured savings and loan association, write to:
Office of Thrift Supervision
Consumer Affairs Program
Washington, DC 20552
If your complaint concerns a federally-chartered credit union,
write to:
National Credit Union Administration
Consumer Affairs Division
Washington, DC 20456
Complaints against all kinds of creditors can be referred to:
Department of Justice
Civil Rights Division
Washington, DC 20530
Source
= Federal Trade Commission
Consumer Credit Info Index
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