What does the Equal Credit Opportunity Act (ECOA) prohibit?

The Equal Credit Opportunity Act (ECOA) specifically prohibits discrimination in the extension of credit on the basis of certain protected characteristics. This means that lenders cannot deny credit or impose different terms based on race, color, religion, national origin, sex, marital status, age, or because a person receives public assistance. The intent of the ECOA is to ensure that all individuals have equal access to credit and are treated fairly in the lending process.

This focus on credit discrimination is crucial because it upholds the principle of fairness in financial practices, allowing for a more equitable society where individuals have the opportunity to secure loans and credit regardless of their background or personal circumstances. The prohibition against such discrimination supports the broader goals of preventing economic disparities and fostering an inclusive financial environment.