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  • Subhan Tariq, Esq

Equal Credit Opportunity Act


Every citizen is entitled to equal rights and opportunities as well as equal protection of those rights. Discriminatory policies and practices must not be tolerated and must be refrained from at all times. A federal financial regulation law known as the Equal Credit Opportunity Act was passed in 1974 to ensure that all citizen's rights are protected. The law prohibits discrimination in credit transactions on the grounds of race, color, religion, national origin, sex, marital status, or age. The purpose is to prevent lenders and creditors from discriminating against loan applicants for any reason other than their ability to pay back the loan. Factors directly connected to a person’s creditworthiness can be used to evaluate them when they ask for loans or other forms of credit.

The Equal Credit Opportunity Act (ECOA) applies to all businesses that give credit, including banks, small loan and credit organizations, retail businesses, credit card companies, and credit unions. It also holds true for anybody who engaged in the choice to grant credit or determine credit terms.

The ECOA forbids creditors from treating any applicants differently on any of these grounds:

· The applicant's race, sex, national origin, ethnicity, color, religion, marital status, or age (provided the applicant is old enough to legally enter a contract)

· Any income from any public assistance program that makes up a component of the applicant's income.

· The applicant has exercised his legal rights as provided by the Consumer Credit Protection Act.

According to the ECOA, creditors must let applicants know if their credit applications have been approved or declined within 30 days. If the application is turned down, the creditor is required to let the applicant know the reason for the denial.


Additionally, creditors are required to give account holders a justification for any account closures, credit denials, or modifications to credit terms. For failing to follow the rules, the ECOA has set penalties. It allows for punitive damages of up to $10,000 in individual cases and the lesser of $500,000 or 1% of the credit's net worth in class action lawsuits.


If you feel that you are being discriminated against and that the ECOA is being violated, call Tariq Law, PC, today so that we can help you achieve the rights to that you are entitled.


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