While consumers are not a protected class (such as age or gender), some anti-discrimination laws still apply to consumers in certain situations. For example, creditors may not decline an otherwise qualified mortgage applicant solely on the basis of their skin color. Similarly, a department store issuing credit cannot charge a higher interest rate to a customer with a foreign accent. These discriminatory practices can have a deep and lasting impact on U.S. consumers and unfairly penalize them for being in a protected class. FindLaw's Consumer Discrimination section covers the basics of discrimination as it pertains to consumers, including information on how to file complaints with the appropriate government agency.
The Equal Credit Opportunity Act: Overview
A number of factors may legitimately be considered by lenders when deciding whether to extend credit (and how much, which rates, etc.). But the Equal Credit Opportunity Act (ECOA) prohibits any such decisions that are based on sex, marital status, race, color, national origin, or religion. For example, a lender may not charge a higher interest rate to a couple solely because they speak in foreign accents. There are instances where a creditor may ask you volunteer information about race, gender, and so on; but this is used by federal agencies to help enforce anti-discrimination laws.
Prohibited Acts Under the ECOA
The ECOA prohibits discrimination in a number of different scenarios, from the application process and choices by the lender to the evaluation of one's income and reasons given for denial. Examples of acts that violate the ECOA include the following:
- Upon applying for credit, the creditor asks whether you're widowed or divorced, or asks questions about your spouse (unless the spouse also is applying).
- When deciding whether to give you credit, the creditor considers the racial makeup of the neighborhood where you're planning to buy a home.
- The creditor assumes that a woman of child bearing age who is applying for credit will stop working to raise children at some point in the near future
In addition, the ECOA guarantees certain rights such as the right to know why your credit application was rejected, to have credit in your birth name (if you choose to do so), know whether or not your application was accepted within 30 days of applying, and other provisions.
The Fair Housing Act
The federal Fair Housing Act (FHA) overlaps with the ECOA in the sense that it prohibits discrimination on the basis of race, color, religion, national origin, and sex. The Act specifically covers residential real estate transactions, including loans for the purchase, improvement, or maintenance of your home where the home is used as collateral. In other words, this applies to virtually all mortgages. Unlike the ECOA, the FHA prohibits discrimination on the basis of disability and familial status (ECOA covers marital status).
Click on a link below to learn more about how consumers are protected against discriminatory acts.