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Credit Discrimination

The United States is a credit-based society, meaning credit defines what a person can and cannot do. Credit allows people to buy homes, go to school, and build business that helps people to provide for themselves and their loved ones.

Credit discrimination, in turn, makes it so that some people can never access these opportunities. In fact, credit discrimination permeates American society. Consumers face difficulties obtaining market-rate first and second mortgages. Many banks do not maintain branches in minority neighborhoods. The disparity in mortgage approval rates between whites and non-whites, as well as disparities in the terms on which mortgage credit is offered, are evidence that discrimination in the marketplace persists. Likewise, car dealers, finance companies, and credit card companies have all engaged in credit discrimination. Creditors may also discriminate on the basis of an applicant’s national origin, sex, marital status, familial status, sexual orientation, disability, age, religion, or the fact that an applicant receives public assistance. Making matters worse, creditors may discriminate at every stage of the credit transaction, including which customers they solicit for business, to whom they grant credit, the terms and conditions on which credit is extended, and how customers are treated in subsequent stages of the credit transaction, such as loan servicing and debt collection.

The Equal Credit Opportunity Act (ECOA) makes it illegal for a creditor to discriminate against you in any aspect of a credit transaction on the basis of your race, color, religion, national origin, sex or marital status, your age, and if you receive income from a public assistance program. ECOA also sets out various procedural requirements that creditors must follow. These procedural requirements are intended to implement the Act’s prohibitions against discrimination. Restrictions include factors that may not be considered in determining creditworthiness, when an existing account may be closed, and ways in which information concerning spouses may be reported to credit reporting agencies. They limit what information can be sought in the application process, and they place restrictions on when a spouse can be required to co-sign an application. They provide for a required notice when action is taken on an application and a required notice as to an applicant’s right to a copy of any appraisal of the value of the applicant’s home. Any individual applying for credit or obligated to pay on a loan may bring an action against any creditor. Creditor is defined broadly to include those arranging and participating in loans.

You might have a case if a creditor discriminates against you by doing any of the following:

  • Offer you credit with unfavorable terms compared to someone else with similar qualifications
  • Refuse to you extend you credit if you qualify for it
  • Keep you from applying for credit
  • Closes your account

It is important to be aware of the warning signs of credit discrimination to prevent it from happening to you.

Discrimination cases can be very complicated as there are many procedures that must be followed. Additionally, there may be relevant state laws that might help your case. At the Law Office of Boris Davidovskiy P.C., we can help you through the process of getting your claim investigated and get the justice you deserve.