prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, because an applicant receives income from a public assistance program, or because an applicant has in good faith exercised any right under the Consumer Credit Protection ...
When your credit circumstances have changed, and the information in your credit report isn't updated to reflect these changes, this failure might be an FCRA violation. Some examples of this kind of FCRA violation include: failing to report that a debt was discharged in bankruptcy. reporting old debts as new or re-aged.
Because the ECOA and Regulation B. prohibit discrimination in any aspect of a credit transaction, a creditor violates the statute and. regulation when discriminating against borrowers on a prohibited basis in approving or denying. loan modifications.
Look for red flags, such as: Treated differently in person than on the phone or online. Discouraged from applying for credit. Encouraged or told to apply for a type of loan that has less favorable terms (for example, a higher interest rate)
A common marital status discrimination violation involves risk-based pricing practices. When two applicants or signers are involved in a lending transaction, a lending policy cannot provide for different pricing guidelines based solely on applicants' or signers' marital status, in violation of ECOA.
Acts or practices that may be deceptive include: making misleading cost or price claims; offering to provide a product or service that is not in fact available; using bait-and-switch techniques; omitting material limitations or conditions from an offer; or failing to provide the promised services.
This Act (Title VII of the Consumer Credit Protection Act) prohibits discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good faith exercise of any rights under the Consumer Credit Protection Act.
Report violations to the appropriate government agency.
Different federal agencies, including the FTC, share enforcement responsibility for the ECOA. Report your concerns to the creditor. Sometimes you can persuade the creditor to reconsider your application.
Examples of Equal Credit Opportunity Act (ECOA) Enforcement
One common violation of the ECOA is charging higher rates or fees to Black, Indigenous, and People of Color (BIPOC) applicants.
Credit Card Act Violations
Common complaints are billing, advertising, fees, interest rates, rewards and collection problems.
When a creditor, landlord, employer, utility company, etc. pulls your credit without your permission, or without a permissible purpose, this is a violation of the FCRA.
If you find errors in your credit report, you should send a certified letter with your dispute to each credit bureau that has the incorrect information. Credit bureaus are required to conduct a reasonable investigation and correct any verified inaccuracies within 30 to 45 days.
If ECOA is violated, liability for punitive damages is limited to $10,000 in individual actions and “the lesser of $500,000 or 1 percent of the creditor's net worth in class actions.” In addition, “the awarding of costs and reasonable attorney's fees” is authorized “to an aggrieved applicant in a successful action.”
It is against the law to be treated unfairly or differently at work based on your: Sex or gender (including gender expression, identity, orientation, and pregnancy status) Race or ethnicity. Age (if you are over 40)
Your marital status cannot be used against you when evaluating your credit application. Any questions about your race, ethnicity and gender cannot be used as a reason to approve or deny your credit application. Creditors have to provide equal information to all borrowers throughout the entire transaction.
The legislation protects people from discrimination on the basis of their individual attributes in certain areas of public life, and provides redress for people who have been discriminated against. It also aims to eliminate, as far as possible, discrimination, sexual harassment and victimisation.
Types of Lending Discrimination
Overt evidence of disparate treatment; • Comparative evidence of disparate treatment; and • Evidence of disparate impact.
Notice of incompleteness Sample
This letter is to inform you that we have received your application for a loan for [describe loan request]; however, we are unable to process this request until we receive [describe missing information]from you.
Signs You Have Been Discriminated Against
You hear the lender make negative comments about race, religion, sex, national origin, the disabled or other protected groups. You are treated differently when you go the office than you were on the phone.
For example, if a lender refuses to make a mortgage loan because of your race or ethnicity, or if a lender charges excessive fees to refinance your current mortgage loan based on your race or ethnicity, the lender is in violation of the federal Fair Housing Act.
It could be a loan officer prioritizing a loan package for a borrower with a surname of Smith over a borrower with a surname of Gonzales. It could be a debt collector using predatory tactics against a female customer while following the rules on collection calls with men because women “are easier to scare into paying”.
Submission of Fraudulent Claims: This means submitting false requests for payment to the government. Whether, for example, a healthcare provider bills Medicare for services a patient never received, or if a defense contractor charges too much for equipment, these deceptive practices constitute clear violations.
The prohibition against unfair and deceptive acts or practices (UDAPs) applies to all products and services offered by a financial institution, directly or indirectly.
These standards were first stated in the FTC Policy Statement on Unfairness. An act or practice is unfair when it (1) causes or is likely to cause substantial injury to consumers, (2) cannot be reasonably avoided by consumers, and (3) is not outweighed by countervailing benefits to consumers or to competition.