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Equal Credit Opportunity Act 1974

  • By: www.fdic.gov
  • Date: September 30, 2011
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TITLE VII—EQUAL CREDIT OPPORTUNITY
Sec.
(a)  It shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction--
(1)  on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract);
(2)  because all or part of the applicant's income derives from any public assistance program; or
(3)  because the applicant has in good faith exercised any right under the Consumer Credit Protection Act.
(b)  It shall not constitute discrimination for purposes of this title for a creditor--
(1)  to make an inquiry of marital status if such inquiry is for the purpose of ascertaining the creditor's rights and remedies applicable to the particular extension of credit and not to discriminate in a determination of credit-worthiness;
(2)  to make an inquiry of the applicant's age or of whether the applicant's income derives from any public assistance program if such inquiry is for the purpose of determining the amount and probable continuance of income levels, credit history, or other pertinent element of credit-worthiness as provided in regulations of the Board;
(3)  to use any empirically derived credit system which considers age if such system is demonstrably and statistically sound in accordance with regulations of the Board, except that in the operation of such system the age of an elderly applicant may not be assigned a negative factor or value; or
(4)  to make an inquiry or to consider the age of an elderly applicant when the age of such applicant is to be used by the creditor in the extension of credit in favor of such applicant.
[Source:  Section 701 of title VII of the Act of May 29, 1968 (Pub. L. No. 90--321), as added by section 503 of title V of the Act of October 28, 1974 (Pub. L. No. 93--495; 88 Stat. 1521), effective October 28, 1975, as amended by section 2 of the Act of March 23, 1976 (Pub. L. No. 94--239; 90 Stat. 251), effective March 23, 1977; section 223(d) of title II of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2306), effective December 19, 1991]
NOTES
The Congress finds that there is a need to insure that the various financial institutions and other firms engaged in the extensions of credit exercise their responsibility to make credit available with fairness, impartiality, and without discrimination on the basis of sex or marital status. Economic stabilization would be enhanced and compe-tition among the various financial institutions and other firms engaged in the extension of credit would be strengthened by an absence of discrimination on the basis of sex or marital status, as well as by the informed use of credit which Congress has heretofore sought to promote. It is the purpose of this [Equal Credit Opportunity] Act to require that financial institutions and other firms engaged in the extension of credit make that credit equally available to all creditworthy customers without regard to sex or marital status.
(a)  The definitions and rules of construction set forth in this section are applicable for the purposes of this title.
(b)  The term "applicant" means any person who applies to a creditor directly for an extension, renewal, or continuation of credit, or applies to a creditor indirectly by use of an existing credit plan for an amount exceeding a previously established credit limit.
(c)  The term "Board" refers to the Board of Governors of the Federal Reserve System.
(d)  The term "credit" means the right granted by a creditor to a debtor to defer payment of debt or to incur debts and defer its payment or to purchase property or services and defer payment therefor.
(e)  The term "creditor" means any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit.
(f)  The term "person" means a natural person, a corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association.
(g)  Any reference to any requirement imposed under this title or any provision thereof includes reference to the regulations of the Board under this title or the provision thereof in question.
[Codified to 15 U.S.C. 1691a]
§ 703.  Regulations
(a)(1)  The Board shall prescribe regulations to carry out the purposes of this title. These regulations may contain but are not limited to such classifications, differentiation, or other provision, and may provide for such adjustments and exceptions for any class of transactions, as in the judgment of the Board are necessary or proper to effectuate the purposes of this title, to prevent circumvention or evasion thereof, or to facilitate or substantiate compliance therewith.
(2)  Such regulations may exempt from the provisions of this title any class of transactions that are not primarily for personal, family, or household purposes, or business or commercial loans made available by a financial institution, except that a particular type within a class of such transactions may be exempted if the Board determines, after making an express finding that the application of this title or of any provision of this title of such transaction would not contribute substantially to effecting the purposes of this title.
(3)  An exemption granted pursuant to paragraph (2) shall be for no longer than five years and shall be extended only if the Board makes a subsequent determination, in the manner described by such paragraph, that such exemption remains appropriate.
(4)  Pursuant to Board regulations, entities making business or commercial loans shall maintain such records or other data relating to such loans as may be necessary to evidence compliance with this subsection or enforce any action pursuant to the authority of this Act. In no event shall such records or data be maintained for a period of less than one year. The Board shall promulgate regulations to implement this paragraph in the manner prescribed by chapter 5 of title 5, United States Code.
(5)  The Board shall provide in regulations that an applicant for a business or commercial loan shall be provided a written notice of such applicant's right to receive a written statement of the reasons for the denial of such loan.
[Codified to 15 U.S.C. 1691b]
[Source:  Section 703 of title VII of the Act of May 29, 1968 (Pub. L. No. 90--321), as added by section 503 of title V of the Act of October 28, 1974 (Pub. L. No. 93--495; 88 Stat. 1522), effective October 28, 1975, as amended by section 3 of the Act of March 23, 1976 (Pub. L.
No. 94--239; 90 Stat. 252), effective March 23, 1976; section 301 of title III of the Act of October 25, 1988 (Pub. L. No. 100--533; 102 Stat. 2692), effective October 25, 1988]
§ 704.  Administrative enforcement
(a)  Compliance with the requirements imposed under this title shall be enforced under:
(1)  section 8 of the Federal Deposit Insurance Act, in the case of--
(A)  national banks, and Federal branches and Federal agencies of foreign banks, by the Office of the Comptroller of the Currency;
(B)  member banks of the Federal Reserve System (other than national banks), branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25(a) of the Federal Reserve Act, by the Board of Governors of the Federal Reserve System; and
(C)  banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System) and insured State branches of foreign banks, by the Board of Directors of the Federal Deposit Insurance Corporation;
(2)  Section 8 of the Federal Deposit Insurance Act, by the Director of the Office of Thrift Supervision, in the case of a savings association the deposits of which are insured by the Federal Deposit Insurance Corporation.
(3)  The Federal Credit Union Act, by the Administrator of the National Credit Union Administration with respect to any Federal Credit Union.
(4)  The Acts to regulate commerce, by the Secretary of Transportation, with respect to all carriers subject to the jurisdiction of the Surface Transportation Board.
(5)  The Federal Aviation Act of 1958, by the Civil Aeronautics Board with respect to any carrier or foreign air carrier subject to that Act.
(6)  The Packers and Stockyards Act, 1921 (except as provided in section 406 of that Act), by the Secretary of Agriculture with respect to any activities subject to that Act.
(7)  The Farm Credit Act of 1971, by the Farm Credit Administration with respect to any Federal land bank, Federal land bank association, Federal intermediate credit bank, and production credit association;
(8)  The Securities Exchange Act of 1934, by the Securities and Exchange Commission with respect to brokers and dealers; and
(9)  The Small Business Investment Act of 1958, by the Small Business Administration, with respect to small business investment companies.
The terms used in paragraph (1) that are not defined in this title or otherwise defined in section 3(s) of the Federal Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the meaning given to them in section 1(b) of the International Banking Act of 1978 (12 U.S.C. 3101).
(b)  For the purpose of the exercise by any agency referred to in subsection (a) of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this title shall be deemed to be a violation of a requirement imposed under that Act. In addition to its powers under any provision of law specifically referred to in subsection (a), each of the agencies referred to in that subsection may exercise for the purpose of enforcing compliance with any requirement imposed under this title, any other authority conferred on it by law. The exercise of the authorities of any of the agencies referred to in subsection (a) for the purpose of enforcing compliance with any requirement imposed under this title shall in no way preclude the exercise of such authorities for the purpose of enforcing compliance with any other provision of law not relating to the prohibition of discrimination on the basis of sex or marital status with respect to any aspect of a credit transaction.
(c)  Except to the extent that enforcement of the requirements imposed under this title is specifically committed to some other Government agency under subsection (a), the Federal Trade Commission shall enforce such requirements. For the purpose of the exercise by the Federal Trade Commission of its functions and powers under the Federal Trade Commission Act, a violation of any requirement imposed under this title shall be deemed a violation of a requirement imposed under that Act. All of the functions and powers of the Federal Trade Commission under the Federal Trade Commission Act are available to the Commission to enforce compliance by any person with the requirements imposed under this title, irrespective of whether that person is engaged in commerce or meets any other jurisdictional tests in the Federal Trade Commission Act, including the power to enforce any Federal Reserve Board regulation promulgated under this title in the same manner as if the violation had been a violation of a Federal Trade Commission trade regulation rule.
[Source:  Section 704 of title VII of the Act of May 29, 1968 (Pub. L. No. 90--321), as added by section 503 of title V of the Act of October 28, 1974 (Pub. L. No. 93--495; 88 Stat. 1522), effective October 28, 1975, and as amended by section 4 of the Act of March 23, 1976 (Pub. L. No. 94--239; 90 Stat. 253), effective March 23, 1976; section 744(m) of title VII of the Act of August 9, 1989 (Pub. L. No. 101--73; 103 Stat. 439), effective August 9, 1989; section 212(d) of title II of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2301), effective December 19, 1991; section 1604(a)(8) of title XVI of the Act of October 28, 1992 (Pub. L. No. 102--550, 106 Stat. 4082), effective December 19, 1991; section 315 of title III of the Act of December 29, 1995 (Pub. L. No. 104--88; 109 Stat. 948), effective December 29, 1995]
§ 704A. Incentives for self-testing and self-correction.
(a)  PRIVILEGED INFORMATION.--
(1)  CONDITIONS FOR PRIVILEGE.--A report or result of a self-test (as that term is defined by regulations of the Board) shall be considered to be privileged under paragraph (2) if a creditor--
(A)  conducts, or authorizes an independent third party to conduct, a self-test of any aspect of a credit transaction by a creditor, in order to determine the level or effectiveness of compliance with this title by the creditor; and
(B)  has identified any possible violation of this title by the creditor and has taken, or is taking, appropriate corrective action to address any such possible violation.
(2)  PRIVILEGED SELF-TEST.--If a creditor meets the conditions specified in subparagraphs (A) and (B) of paragraph (1) with respect to a self-test described in that paragraph, any report or results of that self-test--
(A)  shall be privileged; and
(B)  may not be obtained or used by any applicant, department, or agency in any--
(i)  proceeding or civil action in which one or more violations of this title are alleged; or
(ii)  examination or investigation relating to compliance with this title.
(b)  RESULTS OF SELF-TESTING.--
(1)  IN GENERAL.--No provision of this section may be construed to prevent an applicant, department, or agency from obtaining or using a report or results of any self-test in any proceeding or civil action in which a violation of this title is alleged, or in any examination or investigation of compliance with this title if--
(A)  the creditor or any person with lawful access to the report or results--
(i)  voluntarily releases or discloses all, or any part of, the report or results to the applicant, department, or agency, or to the general public; or
(ii)  refers to or describes the report or results as a defense to charges of violations of this title against the creditor to whom the self-test relates; or
§ 705.  Relation to State laws
(a)  A request for the signature of both parties to a marriage for the purpose of creating a valid lien, passing clear title, waiving inchoate rights to property, or assigning earnings, shall not constitute discrimination under this title: Provided, however, That this provision shall not be construed to permit a creditor to take sex or marital status into account in connection with the evaluation of creditworthiness of any applicant.
(b)  Consideration or application of State property laws directly or indirectly affecting creditworthiness shall not constitute discrimination for purposes of this title.
(c)  Any provision of State law which prohibits the separate extension of consumer credit to each party to a marriage shall not apply in any case where each party to a marriage voluntarily applies for separate credit from the same creditor: Provided, That in any case where such a State law is so preempted, each party to the marriage shall be solely responsible for the debt so contracted.
(d)  When each party to a marriage separately and voluntarily applies for and obtains separate credit accounts with the same creditor, those accounts shall not be aggregated or otherwise combined for purposes of determining permissible finance charges or permissible loan ceilings under the laws of any State or of the United States.
(e)  Where the same act or omission constitutes a violation of this title and of applicable State law, a person aggrieved by such conduct may bring a legal action to recover monetary damages either under this title or under such State law, but not both. This election of remedies shall not apply to court actions in which the relief sought does not include monetary damages or to administrative actions.
(f)  This title does not annul, alter, or affect, or exempt any peron subject to the provisions of this title from complying with, the laws of any State with respect to credit discrimination, except to the extent that those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. The Board is authorized to determine whether such inconsistencies exist. The Board may not determine that any State law is inconsistent with any provision of this title if the Board determines that such law gives greater protection to the applicant.
§ 706.  Civil liability
(a)  Any creditor who fails to comply with any requirement imposed under this title shall be liable to the aggrieved applicant for any actual damages subtained by such applicant acting either in an individual capacity or as a member of a class.
(b)  Any creditor, other than a government or governmental subdivision or agency, who fails to comply with any requirement imposed under this title shall be liable to the aggrieved applicant for punitive damages in an amount not greater than $10,000, in addition to any actual damages provided in subsection (a), except that in the case of a class action the total recovery under this subsection shall not exceed the lesser of $500,000 or 1 per centum of the net worth of the creditor. In determining the amount of such damages in any action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of compliance by the creditor, the resources of the creditor, the number of persons adversely affected, and the extent to which the creditor's failure of compliance was intentional.
(c)  Upon application by an aggrieved applicant, the appropriate United States district court or any other court of competent jurisdiction may grant such equitable and declaratory relief as is necessary to enforce the requirements imposed under this title.
(d)  In the case of any successful action under subsection (a), (b), or (c), the costs of the action, together with a reasonable attorney's fee as determined by the court, shall be added to any damages awarded by the court under such subsection.
(e)  No provision of this title imposing liability shall apply to any act done or omitted in good faith in conformity with any official rule, regulation, or interpretation thereof by the Board or in conformity with any interpretation or approval by an official or employee of the Federal Reserve System duly authorized by the Board to issue such interpretations or approvals under such procedures as the Board may prescribe therefor, notwithstanding that after such act or omission has occurred, such rule, regulation, interpretation, or approval is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.
(f)  Any action under this section may be brought in the appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction. No such action shall be brought later than two years from the date of the occurrence of the violation, except that--
(1)  whenever any agency having responsibility for administrative enforcement under section 704 commences an enforcement proceeding within two years from the date of the occurrence of the violation,
(2)  whenever the Attorney General commences a civil action under this section within two years from the date of the occurrence of the violation, then any applicant who has been a victim of the discrimination which is the subject of such proceeding or civil action may bring an action under this section not later than one year after the commencement of that proceeding or action.
§ 707.  Annual reports to Congress
Each year, the Board and the Attorney General shall, respectively, make reports to the Congress concerning the administration of their functions under this title, including such recommendations as the Board and the Attorney General, respectively, deem necessary or appropriate. In addition, each report of the Board shall include its assessment of the extent to which compliance with the requirements of this title is being achieved, and a summary of the enforcement actions taken by each of the agencies assigned administrative enforcement responsibilities under section 704.
[Codified to 15 U.S.C. 1691f]
§ 708.  Effective date
§ 709.  Short title
This title may be cited as the "Equal Credit Opportunity Act."
[Codified to 15 U.S.C. 1691 note]
[Source:  Section 709 of title VII of the Act of May 29, 1968 (Pub. L. No. 90--321), as added by section 1(b) of the Act of March 23, 1976 (Pub. L. No. 94--239; 90 Stat. 251), effective March 23, 1976]

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