The act also made it illegal to decline to consider any income earned from a part-time job, pension, annuity, or retirement benefits programs. The ECOA made it illegal to disallow regular sources of income, such as welfare payments or social security payments. However, it allows creditors to ask about the number, ages, and financial obligations of any existing children. The only stipulation is if the person lives in a community property state. Additionally, creditors can’t ask a person if they plan on having children or additional children. Other Benefits of the LawĬreditors can’t ask about marital status if a candidate is applying for a separate, unsecured credit. These laws work together to fight discrimination of any kind in the lending world. Instead, they were using people’s low-income as an excuse to continue to discriminate against these groups. While discriminating against people because of their race, religion, gender was illegal, these companies were finding new ways to discriminate. The CRA was a way of re-enforcing the Equal Credit Opportunity Act. The CRA makes it so lenders and creditors can not discriminate against those with middle to low incomes, so long as the applicants meet the requirements for receiving a loan. The act motivated lenders and creditors to invest in underprivileged areas and neighborhoods. People of color, women, and those of certain religious denominations weren’t able to get loans, even if they were qualified. The Equal Credit Opportunity Act passed 3 years before the Community Reinvestment Act (CRA), both helping to remove this discrimination. This includes banks, retailers, credit unions, and credit card companies. This law applies to any person who regularly participates in credit-related activity through normal acts of business. This includes those who receive a portion or all of their income from a public assistance program and those who have exercised their rights under the Consumer Credit Protection Act in good faith. The Equal Credit Opportunity Act (ECOA) makes it illegal for creditors or lenders to discriminate against any applicant based on their: In 1974, Congress passed the Equal Credit Opportunity Act, under President Gerald Ford.
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