§ 1691. — Scope of prohibition.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC1691]
TITLE 15--COMMERCE AND TRADE
CHAPTER 41--CONSUMER CREDIT PROTECTION
SUBCHAPTER IV--EQUAL CREDIT OPPORTUNITY
Sec. 1691. Scope of prohibition
(a) Activities constituting discrimination
It shall be unlawful for any creditor to discriminate against any
applicant, with respect to any aspect of a credit transaction--
(1) on the basis of race, color, religion, national origin, sex
or marital status, or age (provided the applicant has the capacity
to contract);
(2) because all or part of the applicant's income derives from
any public assistance program; or
(3) because the applicant has in good faith exercised any right
under this chapter.
(b) Activities not constituting discrimination
It shall not constitute discrimination for purposes of this
subchapter for a creditor--
(1) to make an inquiry of marital status if such inquiry is for
the purpose of ascertaining the creditor's rights and remedies
applicable to the particular extension of credit and not to
discriminate in a determination of credit-worthiness; \1\
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\1\ So in original. Probably should not be hyphenated.
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(2) to make an inquiry of the applicant's age or of whether the
applicant's income derives from any public assistance program if
such inquiry is for the purpose of determining the amount and
probable continuance of income levels, credit history, or other
pertinent element of credit-worthiness \1\ as provided in
regulations of the Board;
(3) to use any empirically derived credit system which considers
age if such system is demonstrably and statistically sound in
accordance with regulations of the Board, except that in the
operation of such system the age of an elderly applicant may not be
assigned a negative factor or value; or
(4) to make an inquiry or to consider the age of an elderly
applicant when the age of such applicant is to be used by the
creditor in the extension of credit in favor of such applicant.
(c) Additional activities not constituting discrimination
It is not a violation of this section for a creditor to refuse to
extend credit offered pursuant to--
(1) any credit assistance program expressly authorized by law
for an economically disadvantaged class of persons;
(2) any credit assistance program administered by a nonprofit
organization for its members or an economically disadvantaged class
of persons; or
(3) any special purpose credit program offered by a profit-
making organization to meet special social needs which meets
standards prescribed in regulations by the Board;
if such refusal is required by or made pursuant to such program.
(d) Reason for adverse action; procedure applicable; ``adverse action''
defined
(1) Within thirty days (or such longer reasonable time as specified
in regulations of the Board for any class of credit transaction) after
receipt of a completed application for credit, a creditor shall notify
the applicant of its action on the application.
(2) Each applicant against whom adverse action is taken shall be
entitled to a statement of reasons for such action from the creditor. A
creditor satisfies this obligation by--
(A) providing statements of reasons in writing as a matter of
course to applicants against whom adverse action is taken; or
(B) giving written notification of adverse action which
discloses (i) the applicant's right to a statement of reasons within
thirty days after receipt by the creditor of a request made within
sixty days after such notification, and (ii) the identity of the
person or office from which such statement may be obtained. Such
statement may be given orally if the written notification advises
the applicant of his right to have the statement of reasons
confirmed in writing on written request.
(3) A statement of reasons meets the requirements of this section
only if it contains the specific reasons for the adverse action taken.
(4) Where a creditor has been requested by a third party to make a
specific extension of credit directly or indirectly to an applicant, the
notification and statement of reasons required by this subsection may be
made directly by such creditor, or indirectly through the third party,
provided in either case that the identity of the creditor is disclosed.
(5) The requirements of paragraph (2), (3), or (4) may be satisfied
by verbal statements or notifications in the case of any creditor who
did not act on more than one hundred and fifty applications during the
calendar year preceding the calendar year in which the adverse action is
taken, as determined under regulations of the Board.
(6) For purposes of this subsection, the term ``adverse action''
means a denial or revocation of credit, a change in the terms of an
existing credit arrangement, or a refusal to grant credit in
substantially the amount or on substantially the terms requested. Such
term does not include a refusal to extend additional credit under an
existing credit arrangement where the applicant is delinquent or
otherwise in default, or where such additional credit would exceed a
previously established credit limit.
(e) Appraisals; copies of reports to applicants; costs
Each creditor shall promptly furnish an applicant, upon written
request by the applicant made within a reasonable period of time of the
application, a copy of the appraisal report used in connection with the
applicant's application for a loan that is or would have been secured by
a lien on residential real property. The creditor may require the
applicant to reimburse the creditor for the cost of the appraisal.
(Pub. L. 90-321, title VII, Sec. 701, as added Pub. L. 93-495, title V,
Sec. 503, Oct. 28, 1974, 88 Stat. 1521; amended Pub. L. 94-239, Sec. 2,
Mar. 23, 1976, 90 Stat. 251; Pub. L. 102-242, title II, Sec. 223(d),
Dec. 19, 1991, 105 Stat. 2306.)
Amendments
1991--Subsec. (e). Pub. L. 102-242 added subsec. (e).
1976--Subsec. (a). Pub. L. 94-239 designated existing provisions as
cl. (1), expanded prohibition against discrimination to include race,
color, religion, national origin and age, and added cls. (2) and (3).
Subsec. (b). Pub. L. 94-239 designated existing provisions as cl.
(1) and added cls. (2) to (4).
Subsecs. (c), (d). Pub. L. 94-239 added subsecs. (c) and (d).
Effective Date
Section 708, formerly Sec. 707, of title VII of Pub. L. 90-321, as
added by Pub. L. 93-495, title V, Sec. 503, Oct. 28, 1974, 88 Stat.
1525, renumbered and amended by Pub. L. 94-239, Secs. 7, 8, Mar. 23,
1976, 90 Stat. 255, provided that: ``This title [enacting this
subchapter and provisions set out as notes under section 1691 of this
title] takes effect upon the expiration of one year after the date of
its enactment [Oct. 28, 1974]. The amendments made by the Equal Credit
Opportunity Act Amendments of 1976 [enacting section 1691f of this
title, amending this section and sections 1691b, 1691c, 1691d, and 1691e
of this title, repealing section 1609 of this title, enacting provisions
set out as notes under this section, and repealing provisions set out as
a note under this section] shall take effect on the date of enactment
thereof [Mar. 23, 1976] and shall apply to any violation occurring on or
after such date, except that the amendments made to section 701 of the
Equal Credit Opportunity Act [this section] shall take effect 12 months
after the date of enactment [Mar. 23, 1976].''
Short Title
This subchapter known as the ``Equal Credit Opportunity Act'', see
Short Title note set out under section 1601 of this title.
Congressional Findings and Statement of Purpose
Section 502 of Pub. L. 93-495 provided that: ``The Congress finds
that there is a need to insure that the various financial institutions
and other firms engaged in the extensions of credit exercise their
responsibility to make credit available with fairness, impartiality, and
without discrimination on the basis of sex or marital status. Economic
stabilization would be enhanced and competition among the various
financial institutions and other firms engaged in the extension of
credit would be strengthened by an absence of discrimination on the
basis of sex or marital status, as well as by the informed use of credit
which Congress has heretofore sought to promote. It is the purpose of
this Act [see Short Title note set out under section 1601 of this title]
to require that financial institutions and other firms engaged in the
extension of credit make that credit equally available to all credit-
worthy customers without regard to sex or marital status.''
Section Referred to in Other Sections
This section is referred to in sections 1681a, 1691d, 1691e of this
title.
