What is the Equal Credit Opportunity Act? Part II

The Equal Credit Opportunity Act (EPA) is the federal legislation that sets the rules under which lenders can make loans to people, families, or groups. Often people use credit to cover a mortgage or a vehicle, an education or home improvement project, a necessary remodeling project, a new car or boat, or for business funding. A loan that is made based on an applicant’s credit history affects the interest rate, length of the loan, and the monthly payments. Credit history information can affect an application for a mortgage, auto loan, or student loan. It is very important for lenders to understand the factors that can cause an adverse credit rating.

Under the EPA, a creditor cannot use a debtor’s payment history to deny a loan request. Another part of the EPA discusses the measures that a creditor must take to ensure that an application for a loan will not be denied based on a creditor’s history of denying credit requests. If a lender fails to follow this part of the law, he or she could be subject to civil fines. In addition to civil fines, a creditor who fails to provide an applicant with reasonable notice that his or her application has been denied can be subject to punitive damages. Punitive damages include paying back the loan in full to the lender, but in the case of a federal loan, the lender might also be Required to repay a portion of the applicant’s prospective tax debts.

The Equal Credit Opportunity Act also contains a provision that prohibits a creditor from discriminating against an applicant on the basis of race, gender, religion, national origin, age, political affiliation, or any other similar criterion. The provision also protects against creditors who fail to give applicants an equal credit treatment. According to experts, employers cannot use these laws to discriminate against employees. A section of the Fair Labor Standards Act, which is a civil statute, explicitly allows an employer to discriminate against employees if they don’t meet minimum qualifications for employment.

How are debt collection agencies able to discriminate? The Equal Credit Opportunity Act does not specifically mention any type of discrimination when it comes to debt collectors. However, the drafters of the act did consider some types of discrimination based on public assistance income. According to these laws, a collection agency can only take action against an applicant who receives federal assistance. The federal reserve and the postal services do not fall under this category. Therefore, if a collector obtains a federal check and uses it to settle a past due bill, the bill will not be charged back to the applicant.

So, how is a public assistance applicant defined under the Fair Debt Collection Practices Act? The Fair Debt Collection Practices Act considers an applicant who receives federal assistance to be a low-income family. However, the Act also recognizes creditors as well as organizations and employers as non-profit organizations. In addition, private schools, child care centers, and state and local governments are defined by the Act.

According to the Equal Credit Opportunity Act, creditors may not discriminate in providing services, goods or accommodations. They may not deny their services to an applicant based on any protected grounds. An example of a protected ground is national origin. National origin does not just refer to ethnic background. It also includes a person’s place of birth. So, if a creditor refuse to grant credit to an applicant because of national origin, the applicant should be able to challenge that decision in court.

How are employers and public assistance defined under the Fair Credit Opportunity Act? The Fair Credit Opportunity Act also states that lenders or creditors may ask questions about an applicant’s credit report, current financial status and assets or income potential. If these questions are found to be legitimate, the applicant may be denied credit. This means that employers or creditors may ask potential employees or applicants about their race, color, religion, national origin, sex, marital status or other protected grounds. So if you are applying for a job, remember to carefully check your application form to make sure that it doesn’t include any of these prohibited areas.

Now that you know the above information, what’s your next step? Take action now and fight back against employment discrimination and other civil liability. Contact a legal office that specializes in filing lawsuits on a case-by-case basis

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