Legal Definitions - Equal Credit Opportunity Act

The Equal Credit Opportunity Act (ECOA) is a federal law that prohibits creditors from discriminating against credit applicants based on certain characteristics. These characteristics include:

• Race
• Color
• Religion
• National origin
• Age
• Sex
• Marital status

For example, a creditor cannot deny someone a loan simply because they are a certain race or religion. They also cannot charge someone a higher interest rate based on their age or sex.

The ECOA applies to all aspects of a credit transaction, including:

• Applying for credit
• Qualifying for credit
• Setting the terms of credit
• Collecting on a debt

The purpose of the ECOA is to ensure that all individuals have equal access to credit and are not unfairly discriminated against based on certain characteristics.