The Equal Credit Opportunity Act prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance or because you exercise your rights under federal laws. This act applies to banks, savings and loan associations, credit unions, finance companies, department stores, credit card issuers, car and appliance dealers and all others who regularly grant credit. The Act does not guarantee credit. You must still pass the creditor's tests of creditworthiness, but the tests must be applied impartially, and without discrimination.
Creditors look at factors like income, expenses, debts and credit history in deciding whether or not to issue you credit. If you are denied credit, ask the creditor why. The creditor may tell you ways to improve your chances of getting credit.
The best way to determine if you are a victim of credit discrimination is to look at the questions in the credit application. Here are some of the basics of what creditors can and cannot do under this law:
Generally, creditors may not question you about or consider your race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. They cannot ask for information about your spouse unless your spouse will be allowed to use the credit, is applying with you, has a legal interest in property used as collateral, or if you are relying on your spouse’s income or on alimony or child support income from a former spouse.
Men and women are protected from discrimination based on sex and marital status. For example, you may not be denied credit just because you are a woman, whatever your marital status. Creditors may not require you to reapply for credit just because you marry or become widowed or divorced. Nor may they close your account or change the terms of your account on these grounds. However, creditors may ask you to reapply if you relied on your former spouse's income to obtain revolving credit.
Generally, creditors cannot consider your sex, race or national origin, although you may be asked to provide the information if you want to. It helps government agencies enforce anti-discrimination laws . You need not use Mr., Miss, Mrs. or Ms. with your name on an application. You may not be denied credit because of plans to have children.
Creditors must consider your income, even from part-time employment. Creditors may also consider whether income is steady and reliable. A creditor may require that your income be uninterrupted, particularly alimony, or part-time wages. Creditors may not consider whether you have a telephone listing in your own name. They may ask if there is a phone in your home.
A creditor may also ask your age, but if you're 18 years or older, a creditor may not turn you down or decrease your credit just because of your age. A creditor may ask you when you plan to retire or how long your income will continue. You may not be denied credit just because you receive Social Security or Public Assistance, but information related to these sources of income could affect your ability to get credit. So, a creditor may ask your dependents' ages since you may lose benefits when they reach a certain age.
Creditors must tell you whether your application is accepted or denied within 30 days of receiving a completed application. If it has been approved, notice can occur by sending you the credit card, or money, or approving your loan.
Sometimes the creditor offers terms other than those requested in your application. If so, you may be given the opportunity to accept this "counter-offer" within a set period of time.
If your application is denied, the creditor must give you the following information, in writing: 1) creditor name and address, 2) what action was taken, 3) notice of what discrimination is under the Act, 4) the name and address of the federal agency to contact if you believe the lender violated the anti-discrimination law; and 5) specific reasons why credit was denied, or details on how you can get this information. If not immediate provided, the information may be requested in writing within 60 days of notification of denial and the creditor has 30 days to respond to you.
If you feel you have been illegally discriminated against, contact your attorney or the federal agency which regulates the creditor. You may contact the Department of Consumer Affairs to find out the proper agency. Call 800-922-1594 or visit www.consumer.sc.gov.
This information was prepared to give you some general information on the law. It is not intended as legal advice about any particular problem. If you have questions about the law you should consult a lawyer. If you do not know a lawyer, you can call the South Carolina Bar Lawyer Referral Service weekdays between 9 a.m. and 5 p.m. The number is 799-7100 in Richland or Lexington Counties, and 1-800-868-2284 from other parts of the state.