Definition
ECOA prohibits lending discrimination based on race, color, religion, national origin, sex, marital status, age, or public assistance receipt. Lenders can't charge different rates or require different terms based on protected characteristics. Enforcement is serious.
Not sure where this fits?
Answer a few questions and we’ll open the path that fits, at the right step.
Find my pathAbout this term
ECOA ensures lenders cannot deny credit or charge different terms based on protected categories. A lender cannot require higher interest rates, larger down payments, or additional documentation based on protected characteristics. ECOA applies to all creditors including mortgage lenders, banks, and credit card companies. Enforcement is handled by the Consumer Financial Protection Bureau and Department of Justice. Violations can result in actual damages, punitive damages up to $10,000, and attorney fees.
Pro Tip
You're protected from lending discrimination; if denied a loan or offered worse terms, request the specific reason and verify it's based on legitimate factors.
Example
A lender cannot charge a higher rate to a 65-year-old borrower compared to a 45-year-old with identical credit and income; that would violate ECOA protections based on age.