Equal Credit Opportunity Act

Almost four years after the effective date of the original Equal Credit Opportunity Act and three years since it was substantially amended and broadened, the legal and credit worlds are just beginning to see litigation patterns emerging under that Act. At the same time, there continues to be considerable regulatory activity by the Federal Reserve Board, some enforcement initiatives by the Federal Trade Commission, and a proposed set of uniform enforcement guidelines issued by the five federal agencies that supervise depository institutions. The original Equal Credit Opportunity Act of 1974 (Act),1 effective in October 1975, prohibited discrimination in credit transactions on the basis of sex or marital status. Congress significantly expanded the Act in 1976,2 and those amendments (plus a wholly new implementing regulation, Regulation B)3 took effect on March 23, 1977. The 1976 amendments added a number of new protected categories of applicants. Credit discrimination is now barred on the basis of age (provided the applicant has the capacity to contract), race, color, religion, national origin, receipt of public assistance benefits, or good faith exercise of rights under the Consumer Credit Protection Act, as well as sex or marital status. The new Act and Regulation also expressly provide that applicants are entitled to learn the reasons for any adverse action taken against them. Other provisions of the new Regulation B set forth: the information that may be solicited in credit applications; the rules applicable to the evaluation of credit applications; the limitations on the creditor's requirements concerning name designations, nonapplicant signatures, and credit insurance; the creditor's right to establish "special purpose" credit programs; the requirements applicable to furnishing credit histories for married persons; the record retention requirements; and the creditor's duty to gather certain monitoring information about applicants for residential real property credit.4