“Equal Credit Opportunity Act” – a federal law that prohibits lenders and other creditors from discriminating against applicants based on certain protected characteristics, such as race, color, religion, national origin, sex, marital status, age, or receipt of income from public assistance programs.
The ECOA applies to all types of credit, including credit cards, mortgages, car loans, and other types of loans. It requires lenders to consider an applicant’s creditworthiness based on their financial history and ability to repay the loan, rather than on their personal characteristics or other non-financial factors.
Under the ECOA, lenders and other creditors are required to provide applicants with a notice of their rights under the law. The law also requires lenders to notify applicants in writing if their credit application is denied, and to provide specific reasons for the denial (Adverse Action Reasons).
The ECOA is enforced by several government agencies, including the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC).