EQUAL CREDIT
OPPORTUNITY ACT
SCOPE
 Applies to both consumer and non -consumer credit
 Prohibits discrimination on a prohibited basis regarding any
aspect of a credit transaction, including:
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Application procedures (including discouraging applications)
Information requirements
Investigation procedures
Standards of creditworthiness
Terms of credit
Furnishing of credit
Administration of credit accounts
Treatment of delinquent or slow accounts
Collections
T YPES OF DISCRIMINATION
Prohibits both
intentional and
unintentional
discrimination.
Violation can occur
without a conscious
intent to
discriminate.
T YPES OF DISCRIMINATION
 A practice is discriminatory if:
 It constitutes disparate treatment or has a disparate impact on
protected groups AND
 The credit union lacks a legitimate nondiscriminatory reason for its
action, or the asserted reason is found to be a pretext for
discrimination.
 Three types of discrimination:
 Overt Discrimination
 Disparate Treatment
 Disparate Impact
PROTECTED CLASSES
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Sex
Marital status
Race
Color
National origin
Age
The receipt of protected income
Exercise of legal rights under the consumer credit laws
Religion
LIMITS ON INFORMATION
 Sex
 Marital Status
 Spousal Information
 Childbearing Intentions
or Capabilities
 Race, Religion or
National Origin
 Age
 Income
 Credit History
 Monitoring Information
SIGNATURE RULES
 May not require the signature of an applicant’s spouse or any
other person on a credit instrument where an applicant
qualifies by him or herself
 May require the signature of a joint owner only on the
instrument that enables you to reach the property in the event
the applicant dies or is in default on the loan.
 May request a co-signer or a guarantor, but you cannot dictate
who that person is.
JOINT INTENT
 Loan applicants must af firmatively indicate their desire for
joint credit at the time of application.
 Signatures on a promissory note may not be used to show
intent to apply for joint credit.
 Signatures or initials on a credit application af firming
applicants’ intent to apply for joint credit may be used to
establish intent to apply for joint credit.
 The method used to establish intent must be distinct from the
means used by individuals to af firm the accuracy of
information.
 “Safe Harbor” model forms are available in Appendix B to Reg
B.
NOTIFICATION OF ACTION TAKEN
Timing
Disposition:
 Incomplete Application
 Approval
 Counteroffer
 Withdrawal
 Denial
ADVERSE ACTION NOTICE
 Must be in writing
 Given to at least the primary applicant
 Must contain the following items as applicable:
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A statement of the action taken.
The name and address of the credit union.
A statement of the ECOA nondiscrimination requirements
The address for NCUA.
Reasons for adverse action
 Can be combined with FCRA notice
E-SIGN
 May deliver Regulation B disclosures to consumers in
electronic form, subject E-Sign rules.
 Certain disclosures must be provided with an on-line
application
 Disclosures required on the application (for example,
voluntary income disclosures) do not have to conform to
ESIGN.
APPRAISALS
Applicants have a
right to their
appraisals
Notification of the
right is required
Provide appraisals
upon request
Special Rules for
Federal Credit
Unions
RECORD RETENTION REQUIREMENTS
Hint . . . . . 25
months
SELF-TESTING
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Voluntary
Privileged
Self-corrective action is required
Exceptions apply . . . of course.