Equal Credit Opportunity -- September 1992

If you still think only of credit cards when you hear the word 

"credit," think again. Credit is used by millions of consumers 

for a variety of purposes: to finance education, remodel homes, 

obtain small business loans, and for home mortgages.


A law passed by Congress ensures that all consumers will be given 

an equal chance to receive credit. The Equal Credit Opportunity 

Act says it is illegal for creditors to discriminate against 

applicants on the basis of their sex, marital status, race, 

national origin, religion, age or because they get public 

assistance income. This does not mean all consumers who apply for 

credit will get it. Creditors can still use factors such as 

income, expense, debts, and credit history to judge applicants.

The law protects you when dealing with any creditor who regularly 

extends credit, including: banks, small loan and finance 

companies, retail and department stores, credit card companies, 

and credit unions. Anyone participating in the decision to grant 

credit, such as real estate brokers who arrange financing, is 

covered by the law. Businesses applying for credit are protected 

by the law, too.


Consumers have equal rights in every phase of the credit 

application process. Here is a checklist of important rights to 

remember when you request credit:


When You Apply For Credit, A Creditor May Not...


l  Discourage you from applying because of your sex, marital 

status, age, national origin, or because you receive public 

assistance income.


l  Ask you to reveal your sex, race, national origin, or 

religion. A creditor may ask you to voluntarily disclose this 

information if you are applying for a real estate loan. This 

information helps federal agencies enforce anti-discrimination 

laws. A creditor may ask what your residence or immigration 

status is.


l  Ask whether you are divorced or widowed.


l  Ask what your marital status is if you are applying for a  

separate, unsecured account. A creditor may ask you to reveal 

this information if you live in the "community property" states: 

Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, 

and Washington. In any state, a creditor may ask for this 

information if you apply for a joint account or any account 

secured by property.


l  Ask you for information about your husband or wife. A 

creditor may ask about your spouse if: your spouse is applying 

with you; your spouse will be allowed to use the account; you are 

relying on your spouse's income or on alimony or child support 

income from a former spouse; or if you reside in a community 

property state (listed above).


l  Ask about your plans for having or raising children.


l  Ask if you receive alimony, child support, or separate 

maintenance payments.  A creditor may ask for this information if 

you are first told that you don't have to reveal it if you won't 

rely on it to get credit. A creditor may ask if you have to pay 

alimony, child support, or separate maintenance payments.


When Deciding To Give You Credit, A Creditor May Not...


l  Consider your sex, marital status, race, national origin, or 

religion.


l  Consider whether you have a telephone listing in your name. 

A creditor may consider whether there is a phone in your home.


l  Consider the race of the people who live in the neighborhood 

where you want to buy or improve a house with borrowed money.


l  Consider your age, with certain exceptions:

	-- if you are too young to sign contracts. Generally, this 

applies to those 18 and under.


	-- if you are 62 or over, and the creditor will favor you 

because of your age.


	-- if it is used to determine the meaning of other factors 

which are important to credit-worthiness. For example, a creditor 

could use your age to see if your income might be reduced because 

you are about to retire.


	-- if it is used in a scoring system which favors applicants 

age 62 and over. A credit-scoring system assigns different points 

to your answers to application questions. For example, owning a 

home might be worth 10 points, while renting might be worth 5.


The total number of points helps the creditor to decide if 

you are credit-worthy.



When Evaluating Your Income, A Creditor May Not...


l  Refuse to consider reliable public assistance income in same 

manner as other income.


l  Discount income because of your sex or marital status. For 

example, a creditor cannot count a man's salary at 100% and a 

woman's at 75%. A creditor may not assume a woman of 

child-bearing age will stop work to raise children.


l  Discount or refuse to consider income because it is derived 

from part-time employment or from pension, annuity, or  

retirement benefits programs.


l  Refuse to consider consistently-received alimony, child 

support, or separate maintenance payments. A creditor may ask you 

for proof that this income has been received consistently.



You Also Have The Right...


l  To have credit in your birth name (Mary Smith), your first 

and your spouse's last name (Mary Jones), or your first name and 

a combined last name (Mary Smith-Jones).


l  To get credit without a co-signer, if you meet the 

creditor's standards.


l  To have a co-signer other than your husband or wife, if one 

is necessary.


l  To keep your own accounts after you change your name, 

marital status, reach a certain age, or retire, unless the 

creditor had evidence that you are unable or unwilling to pay.


l   To know whether your application was accepted or rejected 

within 30 days of filing it.


l  To know why your application was rejected. The creditor must 

either immediately give you the specific reasons for your 

rejection or tell you of your right to learn the reason if you 

ask them within 60 days. (Examples of reasons are: "Your income 

was low," or "You haven't been employed long enough." Examples of 

unacceptable reasons are: "You didn't meet our minimum 

standards," or "You didn't receive enough points on our 

credit-scoring system.") Indefinite and vague reasons are 

illegal_ask for specifics.


l  To learn the specific reasons why you were offered less	 

favorable terms than you applied for. Example of  less favorable 

terms include higher finance charges or less  money than you 

requested. This does not hold if you accept the less favorable 

terms.


l  To know the specific reasons why your account was closed or 

why the terms of the account were made less favorable to you. 

This does not hold if these actions were taken because your 

account was delinquent or because you have not used the account 

for some time.



A Special Note To Women


A good credit history, a record of how you paid past bills, is 

often necessary to obtain credit. Unfortunately, this hurts many 

married, separated, divorced, and widowed women. There are two 

common reasons women do not have credit histories in their own 

names: they lost their credit histories when they married and 

changed their names; and creditors reported accounts shared by 

married couples in the husband's name only.


The law says that when creditors report histories to credit 

bureaus or to other creditors they must report information on 

accounts shared by married couples in both names. This is true 

only for accounts opened after June 1, 1977. If you and your 

spouse opened an account before that time, you should ask the 

creditor to use both names.


If you are married, divorced, separated, or widowed, you should 

make a special point to call or visit your local credit bureau(s) 

to ensure that all relevant information is in a file under your 

own name. To learn more about building your credit file, send for 

the free brochure, Women and Credit Histories, by writing: Public 

Reference, Federal Trade Commission, Washington, D.C. 20580. You 

also can write to this address for a free copy of Best Sellers, 

which lists all the FTC's consumer information publications.


What You Can Do If You Suspect Discrimination...


l  Complain to the creditor. Make it known that you are aware 

of the law. The creditor may reverse the decision or detect an 

error.


l  Many states have their own equal credit opportunity laws. 

Check with your state's Attorney General's office to see if the 

creditor violated state laws. Your state may decide to take the 

creditor to court.


l  Bring a case in Federal district court. If you win, you can 

recover your damages and be awarded a penalty. You can also 

recover reasonable attorney's fees and court costs. An attorney 

can advise you on how to proceed.


l  Join with others to file a class action suit. You may 

recover punitive damages for the class of up to $500,000 or 1% of 

the creditor's net worth, whichever is less.


l  Report violations to the appropriate government agency. If 

you are denied credit, the creditor must give you the name and 

address of the agency to contact. While the agencies do not 

resolve individual complaints, they do use consumer comments to 

decide which companies to investigate. A list of agencies appears 

at the end of this brochure.



Where To Send Complaints and Questions


If a finance company, mortgage company, state credit union, 

government lending program, is involved, contact the Federal 

Trade Commission office nearest you:



FTC Headquarters

Federal Trade Commission 

6th & Pennsylvania Ave., N.W.

Washington, D.C. 20580

(202) 326-2222

TDD (202) 326-2502



FTC Regional Offices

1718 Peachtree Street, N.W., Suite 1000

Atlanta, Georgia 30367

(404) 347-4836



101 Merrimac Street, Suite 810

Boston, Massachusetts 02114-4719

(617) 424-5960



55 East Monroe Street, Suite 1437

Chicago, Illinois 60603

(312) 353-4423



668 Euclid Avenue, Suite 520-A

Cleveland, Ohio 44114

(216) 522-4207



100 N. Central Expressway, Suite 500

Dallas, Texas 75201

(214) 767-5501



1405 Curtis Street, Suite 2900

Denver, Colorado 80202-2393

(303) 844-2271



11000 Wilshire Boulevard, Suite 13209

Los Angeles, California 90024

(310) 575-7575



150 William Street, Suite 1300

New York, New York 10038

(212) 264-1207



901 Market Street, Suite 570

San Francisco, California 94104

(415) 744-7920



2806 Federal Building, 915 Second Avenue

Seattle, Washington 98174

(206) 220-6363



If your complaint concerns a nationally-chartered bank  (National 

or N.A. will be part of the name), write to:



Comptroller of the Currency

Compliance Management

Mail Stop 7-5

Washington, D.C. 20219



If your complaint concerns a state-chartered bank that is insured 

by the Federal Deposit Insurance Corporation but is not a member 

of the Federal Reserve System, write to:


Federal Deposit Insurance Corporation

Consumer Affairs Division

Washington, D.C. 20429


If your complaint concerns a federally-chartered or 

federally-insured savings and loan association, write to:


Office of Thrift Supervision

Consumer Affairs Program

Washington, D.C. 20552


If your complaint concerns a federally-chartered credit union, 

write to:


National Credit Union Administration

Consumer Affairs Division

Washington, D.C. 20456



Complaints against all kinds of creditors can be referred to:


Department of Justice

Civil Rights Division

Washington, D.C. 20530



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