14 Nov
2011

Equal Credit Opportunity Act

Posted by : Dougie Morris

The Federal Trade Commission, or the FTC, is the nation’s agency in charge of enforcing the Equal Credit Opportunity Act or (ECOA).

The law protects citizens against credit discrimination based on race, color, religion, national origin, sex, marital status or because you receive public assistance. However, keep in mind that not everyone who applies for credit gets it or gets the same terms due to factors like income, expenses, debts, and credit history are among the considerations lenders use to determine your creditworthiness. However, there are certain things that CANNOT be considered or addressed when you apply for any type of loan.

When Applying for Credit, Creditors May Not…

  • Ask for information about your spouse, unless your spouse is applying with you.
  • Ask about your marital status unless in communal property states.
  • Impose different terms or conditions, i.e. like higher interest rate or higher fees, based on discrimination.
  • Ask about your plans to have children, however if you do have kids they can ask you about expenses related to your dependents.
  • They cannot ask if you receive alimony, child support but they can ask if you pay it.

You Also Have the Right to…

  • Know when your application has been accepted or rejected within 30 days of filing.
  • Know why your application was rejected if you ask within 60 days. They also must provide a specific reason, for example, “You don’t have a long enough credit history” NOT “You didn’t meet our qualifications.”
  • If you were offered a smaller loan amount or higher interest rate and DON’T accept these terms, you have a right to know why you were offered the new terms as opposed to the original.

If You Think You Have Been Treated Unfairly…

Always complain to the financial institution you were rejected at first, they may reconsider your application.

Check with your state attorney general to see if any state laws having to do with equal credit opportunity were violated.

Report violations to the correct federal agency in charge, contact the www.federalreserveconsumerhelp.gov or call 1-888-851-1920, and they will connect you to the right federal agency or department. These same laws are practiced and upheld in both prime and subprime loan offers including personal loans.

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