Consumer Credit Laws
Information from The U.S. Department of Justice
The Equal Credit Opportunity Act
The Equal Credit Opportunity Act [ECOA], 15 U.S.C. 1691 et seq. prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or because an applicant receives income from a public assistance program.
The Department of Justice may file a lawsuit under ECOA where there is a pattern or practice of discrimination. In cases involving discrimination in home mortgage loans or home improvement loans, the Department may file suit under both the Fair Housing Act and ECOA. Individuals who believe that they have been the victims of any unfair credit transaction involving residential property may file a complaint with the Department of Housing and Urban Development [HUD] or may file their own lawsuit.
Other federal agencies have general regulatory authority over certain types of lenders and they monitor creditors for their compliance with ECOA. ECOA requires these agencies to refer matters to the Justice Department when there is reason to believe that a creditor is engaged in a pattern or practice of discrimination which violates ECOA. Each year, the Department files a report with congress on its activities under the statute.
The Board of Governors of the Federal Reserve System has issue regulations under ECOA. These regulations, known as Regulation B, provide the substantive and procedural framework for fair lending.
Because the Department's authority to prosecute matters extends only to those instances of a pattern or practice of discrimination on a prohibited basis, individuals who believe that they are the victims of unfair discrimination in a credit transaction should contact the appropriate regulatory agency. The agencies and the types of creditors that they regulate are as follows:
Office of Thrift Supervision [OTS]: Savings associations and federally chartered savings banks (the word "Federal" or the initials "F.S.B." appear in federal institution's name).
Comptroller of Currency [OCC]: National banks and federal branches/agencies of foreign banks (the word "National" or the initials "N.A." appear in or after the bank's name).
Federal Reserve Board [FRB]: Financial institutions that are members of the Federal Reserve System, except national banks and federal branches/agencies of foreign banks.
Federal Deposit Insurance Corporation [FDIC]: State chartered banks that are not members of the Federal Reserve System.
National Credit Union Association [NCUA]: Federal credit unions (the words "Federal credit union" appear in the institution's name).
Federal Trade Commission: Retailers, finance companies, creditors (including most mortgage companies) that are not assigned to another agency.
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