The
fundamentals
of
Personal Credit
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The
fundamentals
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Equal Credit Opportunity Act The Equal Credit Opportunity Act prohibits credit discrimination on the basis of sex, race, marital status, religion, national origin, age, or receipt of public assistance. In certain situations, creditors may request some of this information, except information about religion, but creditors may not use it to discriminate when deciding whether to grant credit. The Equal Credit Opportunity Act may apply to consumer transactions, as well as business transactions, with companies that regularly extend credit, including banks, finance companies, retail and department stores, credit card issuers, and credit unions. It may also apply to others in the credit granting process, including real estate brokers who arrange financing. See LAWDOG Equal Credit Opportunity Act. Always discuss actual cases with your actual legal advisor or legal department. Federal Reserve System Regulation B The Equal Credit Opportunity Act, a portion of the Consumer Credit Protection Act, provides that the Board of Governors of the Federal Reserve System may issue regulations for enforcement of its provisions. The Regulations, known as Regulation B, are used to illustrate LAWDOG Equal Credit Opportunity. The purpose of these regulations is to, essentially, insure that all consumers receive an equal opportunity to obtain credit. The law applies to banks, finance companies, retail stores, credit card issuers, and, generally, anyone who regularly extends credit. (There are some exceptions - see "Definitions and Exceptions" from the previous menu.). The law may
also apply to those who arrange financing, such as real estate brokers.
Unlike the Fair Credit Reporting Act, the Equal Credit Opportunity Act
also applies to business credit. A good summary of the stated goals of
the law is included in Section 202.1 of Regulation B, reproduced below
for illustration. 12 C.F.R. Section 202.1 Authority, scope and purpose. (a) Authority and scope. This regulation is issued by the Board of Governors of the Federal Reserve System pursuant to title VII (Equal Credit Opportunity Act) of the Consumer Credit Protection Act, as amended (15 U.S.C. 1601 et seq.). Except as otherwise provided herein, the regulation applies to all persons who are creditors, as defined in Section 202.2(1). Information collection requirements contained in this regulation have been approved by the Office of Management and Budget under the provisions of 44 U.S.C. 3501 et seq. and have been assigned OMB control number 7100-0201. (b) Purpose. The purpose of this regulation is to promote the availability of credit to all creditworthy applicants without regard to race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract); to the fact that all or part of the applicant's income derives from a public assistance program; or to the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The regulation prohibits creditor practices that discriminate on the basis of any of these factors. The regulation also requires creditors to notify applicants of action taken on their applications; to report credit history in the names of both spouses on an account; to retain records of credit applications; to collect information about the applicant's race and other personal characteristics in applications for certain dwelling-related loans; and to provide applicants with copies of appraisal reports used in connection with credit transactions.
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