Legal Definitions - ECOA

Definition: ECOA stands for Equal Credit Opportunity Act. It is a law that prohibits lenders from discriminating against borrowers based on their race, color, religion, national origin, sex, marital status, age, or because they receive public assistance.

Example: If a lender denies a loan application solely because the applicant is a woman, that would be a violation of ECOA.

Explanation: ECOA ensures that all borrowers are given an equal opportunity to obtain credit. Lenders cannot discriminate against borrowers based on their personal characteristics, such as their race or gender. The example illustrates how ECOA protects women from being unfairly denied credit based on their gender.