![]() The Equal Credit Opportunity Act (ECOA) sets the rules. The act provides for up to $10,000 in punitive damages for individual lawsuits and the lesser of $500,000 or 1 percent of the credit's net worth for class action suits. Every American should have the opportunity to obtain credit without being discriminated against. The ECOA established penalties for failure to comply with the regulations. Creditors must also provide an account holder with a reason for closing an account, refusing to extend credit, or making changes in the terms of credit. If the application is denied, the creditor must inform the applicant of the reason for the denial. The ECOA requires that creditors inform an applicant within 30 days whether his or her credit application has been accepted or denied. Creditors may, however, ask about the ages and financial obligations of the applicant's existing children. In addition to prohibiting discrimination on the basis of marital status, the act prohibits creditors from asking the marital status of an applicant (unless the application is for joint credit) or whether the applicant plans to have children.
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