Definition
The Equal Credit Opportunity Act (ECOA) guarantees all consumers the right to credit and bans discrimination based on race, color, religion, national origin, sex, marital status, age, receipt of public assistance or because they exercised rights under the Consumer Credit Protection Act.
Analysis
The ECOA puts consumers on an even level in terms of ability to apply for credit. It ignores factors that are discriminatory in nature that do not necessarily indicate creditworthiness.
The ECOA does not protect consumers from lending decisions based on income, expenses, debt and credit history. These are all factors in which a lender may base lending decisions.
Exception
The ECOA does make an exception for age discrimination. Any applicant age 62 or older may receive more favorable treatment, such as through qualification for a reverse mortgage. The ECOA does not apply to minors, since anyone under age 18 is unable to enter into a legal contract.
Related Link
FTC Facts for Consumers: Equal Credit Opportunity
