What you need to know about the Equal Credit Opportunity Act and how it can help you: Know your rights

This week, we’re doing two blog posts about what ECOA is and how it protects you.

Lending discrimination is sometimes hard to spot because it can be hard to know if a lender is discriminating against you. Your first line of defense to protect yourself against lending discrimination is to know what to look for when working with a lender.

Warning signs for discrimination

Lending discrimination often happens in subtle ways or behind closed doors, which makes it hard to spot. But there may be warning signs of discrimination such as:

1. Being treated differently in person than on the phone
   
2. Being discouraged from applying for a loan or for a certain type of loan
   
3. Being refused a loan even though you qualify for it based on advertised requirements
   
4. Being offered a loan with a higher rate than the one you were originally offered, or a higher rate than you qualify for based on advertised requirements
   
5. Hearing negative comments about race, national origin, sex, or other protected statuses
   

Reminder: A lender can’t discriminate against you based on any of the following reasons:

• Race
  
• Color
  
• Religion
  
• National origin – The country you or your ancestors were born in
  
• Sex (including gender)
  
• Marital status
  
• Age (as long as the applicant is old enough to enter into a contract)
  
• Receiving money from any public assistance program, such as Social Security Disability Insurance (SSDI) or the Supplemental Nutrition Assistance Program (SNAP)
  
• Exercising your rights under certain consumer protection laws

While it’s good to be on the lookout for those warning signs, sometimes there may be no warning signs and you may be discriminated against and not even realize it. That’s where we come in.

We’re on your side

We spend time investigating instances of possible discrimination, such as whether lenders deny loan applications or charge higher fees or rates based on race or other prohibited characteristics.

Since we opened our doors, we have found violations of ECOA all over the country, and we’ve gotten money back to those who were discriminated against. Here are just a few of the lending discrimination violations we’ve identified that got money back to harmed consumers:

• In 2016, we settled an action against BancorpSouth Bank. We claimed it had in place discriminatory mortgage lending practices that harmed African Americans and other minorities, including illegally redlining, denying African-American applicants because of their race, charging African-American borrowers more because of their race, and implementing an explicitly discriminatory loan denial policy.
• In 2015, we found that American Honda Finance Corporation’s pricing policies resulted in thousands of African-American, Hispanic, and Asian and Pacific Islander borrowers paying higher interest rates for their auto loans because of their race and national origin.
• In 2014, we found that GE Capital, now known as Synchrony Bank, excluded credit card customers from certain debt relief offers if the customer preferred to communicate in Spanish or lived in Puerto Rico, even though they qualified for the promotion.
• In 2013, we found that Ally Bank’s and Ally Financial’s auto loan pricing policies resulted in more than 235,000 African-American, Hispanic, and Asian and Pacific Islander borrowers paying higher interest rates for their auto loans because of their race and national origin.

While you may not be able to spot all discrimination on your own, we’re watching out for you. We supervise banks and other lenders, to ensure they are complying with ECOA. And, we enforce ECOA against companies that violate it – getting money back for you.

If you are having a problem or issue with a financial service or product you can submit a complaint online or by calling us toll-free at (855) 411-2372, where we provide services in more than 180 languages. If you don’t want to submit a complaint, you can also share your story, good or bad, about your experience with a financial product or service.

Topics

• • Equal Credit Opportunity Act
• • Fair lending