What is ECOA
Equal Credit Opportunity Act
What regulation is ECOA?
B
Who regulates ECOA?
FRB
Who enforces ECOA?
CFPB along with FTC
When was ECOA enacted?
1974
What is the purpose of ECOA?
- To eliminate discriminatory treatment of credit applicants and to promote the availability of credit to all credit worthy applicants
- Applies to the entire CREDIT industry as a whole, not just mortgages
What disclosures are under ECOA?
- Notice of Right to Receive Appraisal Report- due within 3 business of application
- Notice of Action Taken- due within 30 calendar days of application
- Notice of Adverse Action- due within 30 calendar days of the action
- Notice of Incomplete Application- due within 30 calendar days of application
What are the appraisal report guidelines under ECOA?
Provided to the borrower promptly upon completion (should) or 3 business days prior to close (must)
If the loan is not going to close- due within 30 days of the cancellation or denial
Under ECOA, if the loan is declined, the customer can request an additional appraisal report….
90 days from day of denial
What are the protected characteristics under ECOA?
M.arital Status R.ace B.earing of children A.ge R.eligion N.ation of Origin S.ex
What types of income can lenders NOT refuse?
Alimony or Child Support
Pension, Annuity, or Retirement income
Public Assistance
Under ECOA, what are the labels of marital status?
Married, Unmarried, and Separated
Under ECOA, lenders may not…
- Assume a woman of child bearing age will stop working
- Refuse credit to those who have participated in credit counseling
- Engage in redlining- community based discrimination
- Discourage an applicant from applying
- Refuse to lend to an applicant because they filed an ECOA complaint in the past
What is disparate treatment?
Not treating all applicants the same
Lenders must _____ for ______
self-test, compliance
Corrective action is ________
not admission of guilt
When can civil actions be brought up under ECOA?
2 years
What are the penalties under ECOA?
Civil $5,000/day if there is a pattern $25,000/day
Punitive: 1. Individual actions up to $10,000
2. Class action lawsuits up to $500,000 or 1% of the creditors net worth whichever is less
What is the document retention under ECOA?
25 months (24 months plus 1 month) due to ability to file 2 years of a violation
