CFPB: Equal Credit Opportunity Act protects borrowers after loan

The Consumer Financial Protection Bureau published an advisory opinion affirming that the Equal Credit Opportunity Act bars lenders from discriminating against customers after they have received a loan, not just during the application process.

Details: Among its provisions, the advisory opinion says the ECOA:

  • Prohibits lenders from lowering certain borrowers’ credit limits or subjecting them to more aggressive collections practices on a prohibited basis.

  • Requires lenders to provide “adverse action notices” to borrowers with existing credit to explain unfavorable decisions.

Background: The ECOA bans credit discrimination based on race, color, religion, national origin, sex, marital status, and age. It also protects those receiving money from any public assistance program or exercising their rights under certain consumer protection laws.