Equal Credit Opportunity Act

Adverse Action

1. Adverse Action must be in writing (Denial Letter) 2. Adverse Action must contain a statement of the action taken, contact information for the lender, the name and address of the federal agency with jurisdiction, and the reasons for the decision or a statement advising the borrower their right to receive the reasons. 2A. An applicant can request a statement of reasons within 60 days of receiving the original adverse action notice. 3. If an application is denied due to an appraisal, the borrower has 90 days to request a copy of the appraisal and the lender has 30 days from the date of request to deliver it to the borrower.

Prohibited Practices

1.ECOA prohibits creditors from inquiring about a consumer's marital status or intentions related to having or raising children. 2. Creditors may not publish any from of advertisement that would discourage applicants from making or pursuing an application on a prohibited basis, such as membership in a protected class. 3. Lenders cannot ask if a borrower is single, divorced, or widowed; they must ask the borrower if they are married, unmarried, or separated. 4. Creditors may not ask an applicant if any income stated on the applicant if they receive child support, alimony, or public assistance unless the applicant wants that income to be considered in determining eligibility for the loan. 5. Creditors may not refuse to consider or discount income from alimony, child support, or maintenance if the borrower choose to disclose this information. 6. Creditors may not ask the borrower anything related to children; they may only ask how many dependents they have and how old are the dependents. 7. Creditors may not discriminate a borrowers source of income; however they can discriminate against their amount of income.

Disparate Treatment

A type of discrimination where one doesn't discriminate against all protected classes but some; i.e. shaking the hands of everyone except for Scientologists.

HMDA/ECOA

Applicant should be informed that the information gathered in this section is only used to assure that the lender is not discriminating against applicants and that it is not considered when determining whether or not to grant a loan.

Enforcer of ECOA

Consumer Financial Protection Bureau

Regulation B

ECOA IS regulation B; it requires creditors to not discriminate when granting credit; they must BE equal.

Discrimination

ECOA prohibits discrimination by lenders in any part of a credit transaction on the basis of: race, color, religion, national origin, sex, marital status, age (has to be 18), the receipt of income from a public assistance program, or having exercised any rights under Consumer Credit Protection Act.

Copy of Appraisal

ECOA specifies that the borrower is entitled to a copy the appraisal report at least three business days before closing. Lenders have three days upon receipt of an application to notify the borrower of their right to receive a copy of the appraisal.

Protected Classes

Exclusive to ECOA = Age, Marital Status, and Public Assistance. Non-Exclusive to ECOA = Sex, Race, Religion, Color, and national Origin

Overt Discrimination

Explicit, blatantly obvious discrimination.

Disparate Impact

When a practice or policy appears to be non-discriminatory on the face surface but has a disproportionately negative effect on members of a particular race, gender, or other protected class.