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Consumer's Rights Under ECOA
The Act provides certain rights of the consumer as sacrosanct and credit providers may not violate these provisions. Under the Act, a consumer has the right to:
- Have credit in his/her birth name - for example Bill Clark.
- Have credit in his/her first name combined with spouse's last name - for example Mary Clark.
- Get credit without having a cosigner, if eligible.
- Have a cosigner other than the husband or wife or the customer, if one is required.
- Keep his own accounts after change of name, marital status etc.
- Keep his own accounts after reaching a certain age like the age of retirement. Of course, the creditor can refuse if he has the evidence in his possession that the customer is not willing to pay.
- Know the status of application for credit, that is, its acceptance or rejection, within 30 days.
- Know the reasons for rejection of the application and to get a notice from the creditor in this regard. If the customer asks for the reasons, the creditor is duty bound to provide it within 60 days.
- Know why the customer was provided unfavorable conditions in the terms and conditions specified for the loan than what he had opted for or offered upon.
While rejecting an application for loan, the creditor may resort to acceptable reasons like low income or insufficient duration of employment but cannot resort to unacceptable reasons like not meeting the minimum standards prescribed, or not scoring sufficient point on creditor's private credit scoring systems. Indefinite or vague reasons are not acceptable under the provisions laid down in the Act. A special point relating to woman customers is that many of them do not have their own credit report due to marriage and then separation on some grounds. It is necessary for women citizens in United States of America to have their credit report in their own names to make them really eligible for obtaining a good credit. Suspected Discrimination and ECOAAlthough not sure, customers may suspect discrimination in many cases. However, when a consumer suspects that he has been subjected to some discrimination, he or she is supposed to take certain steps as provided under the Act. These are:- Lodg e a formal complaint with the creditor stating that the customer is aware of legal provisions. This may prompt the creditor to rectify the error.
- Contact the State Attorney General with all facts to know whether the creditor has violated ECOA in which case the State may decide to prosecute the creditor.
- You can sue the creditor in a Federal district court for damages including cost of running the case.
- Join with those who also have complaints for a class action suit filing. In this case the award may be anything up to $500,000 or one percent of creditor's net worth.
- Report all violations to appropriate Government Agency. On denial of credit, the creditor is morally and legally obliged to provide you the name and the address of the agency to contact.
Violation of the provisions of the Act shall not be easy to handle for any of the creditors. Whom to Contact and for WhatCustomers are often at bay not knowing exactly whom to contact. Here are some informa tion on whom to contact for what type of cases.
Subject |
Agency to be contacted |
| National Chartered Bank |
Comptroller of the Currency,
Compliance Management,
Mail Stop 7-5 Washington,
DC 20219 |
| State Chartered Bank insured by Federal deposit Insurance Corporation and is not part of Federal Reserve System |
Federal Deposit Insurance CorporationConsumer Affairs DivisionWashington,
DC 20429 |
| Federally Insured or Federally Chartered Loan Association |
Office of Thrift SupervisionConsumer Affairs ProgramWashington,
DC 20552 |
| Credit Unions that are Federally Chartered |
National Credit Union AdministrationConsumer Affairs DivisionWashington,
DC 20456 |
| Retail store, Departmental Store, Small loan and Finance Company, Mortgage Company, Oil Company, Public Utility, State Credit Union, Government facilitated program, Travel and tours agency, and Expense Credit Card Company |
Consumer Response CenterFederal Trade CommissionWashington,
DC 20580 |
| All types of creditors |
Department of JusticeCivil Rights DivisionWashington,
DC 20530 |
Equal Credit Opportunity Act is an act that aims at removing discriminations made by the creditors in providing loans to intending customers and is applicable to all creditors in every sector of the credit providing business. Federal Equal Credit Opportunity Act is an important part of consumer protection legislation in United States of America. As a compliment to the anti-discrimination legislations in United States, Equal Credit Opportunity Act has important contributions to make towards real consumer protection against discriminatory practices followed by any creditor, whether public or private.
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