Specifically, the statute and its corresponding regulations prohibit a creditor from requiring the signature of an applicant’s spouse if the applicant qualifies for a loan under the creditor’s standards. Today, the ECOA is still alive and well and, more importantly, still prohibits discrimination based on sex and marital status in lending practices. As stated in Regulation B, its purpose is to promote the availability of credit to all creditworthy applicants and it applies to both consumer- and business-purpose extensions of credit.
In response, the Federal Reserve Board issued Regulation B which outlines the rules that creditors must comply with when obtaining and processing credit information. To interpret and implement the ECOA, legislators gave the Federal Reserve Board the authority to oversee the necessary regulations. This was especially important in a time when consumer credit began to grow rapidly in the United States. The ECOA, in part, sought to put an end to these practices and promote economic independence for women. That’s because certain types of discriminatory practices prevented women from establishing their own credit history and generally re-enforced economic dependence on their husbands. With respect to sex and marital status, the “purpose of the ECOA to eradicate credit discrimination waged against women, especially married women whom creditors traditionally refused to consider for individual credit. Its purpose - to prohibit discrimination based on sex, marital status, race, ethnicity, or age in lending practices. This was the year that the Equal Credit Opportunity Act (ECOA) became law as part of the federal Consumer Credit Protection Act. The year was 1974 and, on the heels of the civil rights movement, was a time when the country maintained its heightened awareness of equality and discrimination.
As written for the Risk Management AssociationĪs written for the Risk Management Association.
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