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FED ER A L R E S E R V E BANK
OF

DALLAS

E R N E S T T. B A U G H M A N

DALLAS,TEXAS 75222

PRESIDENT

C ir c u la r No. 77-71
June 27, 1977

NEW EQUAL CREDIT O PPO RTUNITY A C T PAMPHLETS

TO A L L MEMBER BANKS IN THE
ELEVENTH FEDERAL RESERVE D IS T R IC T :
Tw o new Federal R eserve consumer pamphlets exp lain in g provisions
of the Equal C re d it O pportunity Act are now ava ilab le for p u b lic d is trib u tio n .
T h e pamphlets a re entitled: "T h e Equal C re d it O pportunity A ct
a n d . . .Women" and "T h e Equal C re d it O pportunity A ct a n d . . .A g e ." One copy of
each pam phlet is enclosed.
I suggest you consider d is trib u tin g copies of each pam phlet to y o u r de­
positors and customers through such means as lobby disp lay and inclusion in
monthly statements. T h e pamphlets are intended to inform the pub lic of the new
law and to elim inate much of the m isunderstanding concerning the law that now
e x is ts .
A fter exam ining the pam phlets, please contact the Bank and Public In ­
formation Departm ent of this B ank, 214-651-6267, and indicate how many pamphlets
a re needed by yo u r b an k. Copies of the pamphlets w i l l , of course, be furnished
free of charg e.
S in c e re ly y o u r s ,
Ernest T . Baughman
President

Enclosures

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

If you are denied credit, first find out why. Remember that
you might try to renegotiate credit terms — such as the
length of the loan or the size of your downpayment — if
some aspect of creditworthiness connected with your age
puts you at a disadvantage. Try to solve the problem with
the creditor, and show you know about your right to
equal credit opportunity.
If the problem can’t be solved and you believe that you
have been discriminated against, you may sue tor actual
damages plus a penalty fee if the violation was inten­
tional. The court will also award you reasonable at­
torney’s fees if there’s been a violation.

To Find Out
More
If you think you have been the victim of discrimination in
connection with credit, you may want to ask the appro­
priate Federal enforcement agency for advice and help.
These agencies and the types of creditors regulated by
each are listed on the back of this pamphlet.
If you need help in locating sources of credit in your com­
munity, you may want to contact a local consumer edu­
cation group or association of retired persons.

Federal Enforcement Agencies
National Banks
Comptroller of the Currency
Consumer Affairs Division
Washington, D.C. 20219
State Member Banks
Federal Reserve Bank serving the district in which the State memDer
bank is located
Nonm ember Insured Banks
Federal Deposit Insurance Corporation Regional Director for the region
in which the nonmember insured bank is located.
Savings Institutions Insured by the FSLIC and Members of the
FHLB System (except for Savings Banks Insured by FDIC)
The Federal Home Loan Bank Board Supervisory Agent in the district
In which the institution is located.
Federal Credit Unions
Regional office of the National Credit Union Administration serving the
area in which the Federal credit union is located.
Creditors Subject to Civil Aeronautics Board
Director, Bureau of Enforcement
Civil Aeronautics Board
1825 Connecticut Avenue, N.W.
Washington, D.C. 20428

The
Equal
Credit
Opportunity
Act

Creditors Subject to Interstate C om m erce C om m ission
Office. of Proceedings
Interstate Commerce Commission
Washington, D.C ?0523
Creditors Subject to Packers and Stockyards Act
Nearest Packers and Stockyards Administration area supervisor
Small B usiness Investm ent Com panies
U.S. Small Business Administration
1441 L Street. N.W.
Washington, D C 20416
Brokers and Dealers
Securities and Exchange Commission
Washington, D C. 20549
Federal Land Banks. Federal Land Bank A ssociations, Federal
Intermediate Credit Banks and Production Credit A sso­
ciations
Farm Credit Administration
490 L’Enfant Plaza, S.W.
Washington, D C. 20578

Board o f Governors o f the Federal Reserve System
Washington, D.C. 20551
(May 1977)

Retail, Department Stores, C onsum er Finance Com panies, All
other Creditors, and All Nonbank Credit Card Issuers (Lenders
operating on a local or regional basis should use the address of the
F.T.C. Regional Office in which they operate)
Federal Trade Commission
Equal Credit Opportunity
Washington, D.C. 20580

. . . and AGE

J.

The Equal Credit Opportunity Act
- .. .and Age
You retire this year at age 63, planning to fulfill a lifetime
dream of sailing on the seas. But, despite a good credit
history and a comfortable income, you find that the
money you can borrow would barely buy a rowboat.
What do you do?
On your 65th birthday you receive a notice to reapply for
your credit card at a local department store. Your finan­
cial situation is unchanged from last year. What do you
do?
You may have a complaint under the Equal Credit Op­
portunity Act. This Act prohibits discrimination against an
applicant for credit on the basis of age, sex, marital status,
race, color, religion, national origin, and other factors.
This pamphlet describes the provisions of the Act (and
the regulation issued by the Federal Reserve to carry it
out) that prevent your age from being used against you
when you need credit.

Rating You As
A Credit Risk —
The General Rules
Creditors use various criteria in determining the types of
loans they will make and the creditworthiness of the
people to whom they will lend. They want to be assured
that you are both able and willing to repay debt. They will
therefore ask questions about your income, your ex­
penses, your debts, and your reliability. Do you have
savings and investments? Do you own your own home?
How long have you lived at your current address? What
is your credit history?

The Equal Credit Opportunity Act does not prohibit a
creditor from using such criteria. It does not give anyone
an automatic right to credit or require that loans be made
to people who are not good credit risks.
Under the law, a creditor may also ask how old you are.
However, the use of this information is restricted. The
law says that your age may not be the basis for an

arbitrary decision to deny or decrease credit if you
otherwise qualify. You may not be turned down for
credit just because you are over a certain age.
A creditor also may not:
• refuse to consider your retirement income in rating
your credit application.
• require you to reapply, change the terms of your
account, or close your account just because you
reach a certain age or retire.
• deny you credit or close an account because credit
life insurance or other credit-related insurance is not
available to persons your age.
Some creditors rely on a system of credit-scoring to rate
you as a credit risk. Based on the creditor’s experience, a
certain number of points is given to each characteristic
which has proved to be an accurate predictor of credit­
worthiness. The Equal Credit Opportunity Act permits a
creditor who uses such a system to score your age. But:
• if you are 62 or older you must be given at least as
many points for age as any person under 62.

Special
Considerations
Age has economic consequences. If you are young and
just entering the labor force, your earnings are likely to
grow over the years. On the other hand, your expenses

are probably rising too, and you may not have built up
much of a credit record to rely on. As you near retirement
age, you are likely to face a loss in income over the next
few years. On the other hand, your expenses are prob­
ably decreasing too, and you may have a solid credit
history to support your application.
All of this information could have an important effect on
your creditworthiness, but not all of it will show up on a
credit form
The law therefore permits a creditor to consider infor­
mation related to age that has a clear bearing on a per­
son’s ability and willingness to repay debt. Consider the
following example:
• Jones applies for a mortgage loan for 30 years with
a 5% downpayment. Jones is 63 years old and his
income will be reduced when he retires in two
years. The loan is denied.
Jones might meet the bank’s standards if the downpay­
ment were larger, if the loan had a shorter term with
higher monthly payments, or if savings and investments
— or other assets easily converted to cash — could be
offered as security for the loan.
If you think there may be a connection between your age
and the factors used to determine creditworthiness, you
should go to your credit interview armed with alternatives
and ready to supply whatever information will help your
chances for credit.

If Credit Is
Denied
A creditor may not stall you on an application. The law
requires that you be notified within 30 days of any action
taken on your application. If credit is denied, this notice
must be in writing, and it must either give specific reasons
for the denial or tell you of your right to request such an
explanation. You have the same rights if a credit account
is closed.

The rule applies to information that creditors furnish to
credit bureaus or other creditors about any account used
by both husband and wife or on which both are liable.
Such information must be reported in the names of each
spouse.
The law also provides new guidelines for considering
credit histories. It says that if credit history is used in rating
your application, a creditor must:
• consider the available credit history on any account
you hold or use jointly with your husband.
• consider any information that you can offer to show
that a favorable credit history on any account in
your husband’s name reflects your own credit his­
tory accurately.
Some women have been denied credit simply because an
ex-spouse was a poor credit risk. The law also says that a
creditor must:
• consider any information that you can offer to show
that an unfavorable credit history on any account
you shared with your spouse does not reflect your
own credit history accurately.

The Most
Important Rules
You can’t be refused credit Just because you’re
a woman.
You can’t be refused credit Just because you’re
single, married, separated, divorced, or
widowed.
You can’t be refused credit because a creditor
decides you’re of child-bearing age and, as a
consequence, won’t count your income.
You can’t be refused credit because a creditor
won’t count income you receive regularly from
alimony or child support.
You can have credit in your own name if
you’re creditworthy.
When you apply for your own credit and rely
on your own income, information about your
spouse or his co-signature can be required
only under certain circumstances.

Another Federal law, the Fair Credit Reporting Act, gives
you the right to get a copy of your credit history from a
credit reporting agency and to correct any inaccurate in­
formation in it.

You can keep your own accounts and your
own credit history if your marital status
changes.

Notice and Penalties

You can build up your own credit record be­
cause new accounts must be carried in the
names of husband and wife if both use the ac­
count or are liable on it.

A creditor may not stall you on an application You must
be notified within 30 days of any action taken on your ap­
plication. If credit is denied, the notice must be in writing
and it must either give specific reasons for the denial or
tell you that you can request such an explanation. You
have the same right if a credit account is closed.
If you are denied credit, first find out why. Try to solve the
problem with the creditor, and show you know about
your right to equal credit opportunity. If the problem can’t
be solved and you think that you’ve been discriminated
against, you can sue for actual damages plus a penalty if
the violation was intentional. The court will also award
you reasonable attorney’s fees if there’s been a violation.

If you are denied credit, you can find out why.

To Find Out More
If you think you have been the victim of discrimination in
connection with credit, you may want to contact the ap­
propriate Federal enforcement agency for advice and
help. These agencies and the types of creditors regulated
by each are listed on the back of this pamphlet.
(Board o f Governors o f the Federal Reserve System, Washington, D.C. 20551)
(May 1977)

Federal Enforcement Agencies
National Banks
Comptroller of the Currency
Consumer Affairs Division
Washington, D.C. 20219
State Member Banks
Federal Reserve Bank serving the district in which the State member
bank is located.
N onm em bef Insured Banks
Federal Deposit Insurance Corporation Regional Director for the region
in which the nonmember insured bank is located.
Savings Institutions Insured by the FSLIC and Members of the
FHLB System (except for Savings Banks insured by FDIC)
The Federal Home Loan Bank Board Supervisory Agent in the district
in which the institution is located.
Federal Credit Unions
Regional office of the National Credit Union Administration serving the
area in j/vhich the Federal credit union is located.
Creditors Subject to Civil Aeronautics Board
Director Bureau of Enforcement
Civil Aeronautics Board
1825 Connecticut Avenue, N.W.
Washington, D.C. 20428
Creditors Subject to Interstate Com m erce Com m ission
Office of Proceedings
Interstate Commerce Commission
Washington, D.C. 20523

The
Equal
Credit
Opportunity
Act
a n d __

Creditors Subject to Packers and Stockyards Act
Nearest Packers and Stockyards Administration area supervisor.
Sm all B usiness Investm ent C om panies
U.S. Small Business Administration
1441L Street, N.W.
Washington, D.C. 20416
Brokers and Dealers
Securities and Exchange Commission
Washington, D.C. 20549
Federal Land Banks, Federal Land Bank A ssociations, Federal
Intermediate Credit Banks and Production Credit A sso­
ciations
Farm Credit Administration
490 L’Enfant Plaza, S.W.
Washington, D.C. 20578
Retail, Department Stores, Consumer Finance Com panies, All
other Creditors, and All Nonbank Credit Card Issuers (Lenders
operating on a local or regional basis should use the address of the
F.T.C. Regional Office in which they operate)
Federal Trade Commission
Equal Credit Opportunity
Washington, D.C. 20580

WOMEN

You and your husband apply for a loan. The application
is denied because of “insufficient income.” You think this
means that your salary was not counted. What do you
do?
You are single and want to buy a home. The bank turns
you down for a mortgage loan, even though you feel sure
that you meet its standards. What do you do?
Your charge account is closed when you get married.
You are told to reapply in your husband’s name. What do
you do?
You may have a complaint under the Equal Credit Op­
portunity Act, a Federal law which prohibits discrimina­
tion against an applicant for credit on the basis of sex,
marital status, race, color, religion, national origin, age
and other factors. This pamphlet describes the provisions
of the Act (and the regulation issued by the Federal Re­
serve to carry it out) that apply to sex and marital status
and that affect you as a woman who wants credit. *
The Equal Credit Opportunity Act does not give anyone
an automatic right to credit. It does require that a creditor
apply the same standard of “creditworthiness” equally to
all applicants.

------------ What I s -----------Creditworthiness?
Creditors choose various criteria to rate you as a credit
risk. They may ask about your finances: how much you
earn, what kinds of savings and investments you have,
what your other sources of income are. They may look
for signs of reliability: your occupation, how long you’ve
been employed, how long you’ve lived at the same
address, whether you own or rent your home. They may
also examine your credit record: how much you owe,
how often you’ve borrowed, and how you’ve managed
past debts.

— What Is Equal Credit —
_____ Opportunity?______
The law says that a creditor may not discriminate against
you — treat you less favorably than another applicant for
credit —because of your sex or marital status.

Just because you are a woman, or single, or
married, a creditor may not turn you down for a
loan.
The rules that follow are designed to stop specific abuses
that have limited women’s ability to get credit.

— Applying for Credit-----Questions About
Your Sex or Marital Status
A creditor may not discourage you from applying for
credit just because you are a woman, or single, or
married. When you fill out a credit application, you
should know that there are only certain questions a
creditor may ask about your sex or marital status.
• You may not be asked your sex on a credit appli­
cation — with one exception. If you apply for a loan
to buy or build a home, a creditor is required to ask
your sex to provide the Federal Government with
information to monitor compliance with the Act.
You do not have to answer the question.
• You do not have to choose a courtesy title (Miss,
Ms., Mrs.) on a credit form.

• A creditor may not request your marital status on
an application for an individual, unsecured account
(a bank credit card or an overdraft checking ac­
count, for example), where no community property
is involved.*

The creditor wants to be assured of two things: your
ability to repay debt and your willingness to do so. The
Equal Credit Opportunity Act does not change this
standard of creditworthiness.

• A creditor may request your marital status in all
other cases. But, you can only be asked whether
you are married, unmarried, or separated (un­
married includes single, divorced or widowed).

'B o th men and women are protected by the ban against discrimination
because of sex or marital status.

'C om m unity property States are: Arizona, California, Idaho, Louisiana,
Nevada, New Mexico, Texas, and Washington.

Rating You As A
Credit Risk

- Extending Credit —YourOwn Account

To make sure that your application is treated fairly, there
are certain other things that a creditor may not do in
deciding whether you are creditworthy.

The law says that a woman has a right to her own credit if
she is creditworthy. If you are getting married, remember
that you can keep your own credit accounts and credit
record.

Specifically, a creditor may not:
• refuse to consider your income because you are a
married woman, even if your income is from part­
time employment.
• ask about your birth control practices or your plans
to have children. A creditor may not assume that
you will have children or that your income will be
interrupted to do so.

Specifically, a creditor may not:
• refuse to grant you an individual account just be­
cause of your sex or marital status.
• refuse to open or maintain an account in your first
name and maiden name, or your first name and
your husband’s surname, or a combined surname.

• refuse to consider reliable alimony, child support, or
separate maintenance payments. However, you
don’t have to disclose such income unless you want
to in order to improve your chances of getting
credit.

• ask for information about your husband or ex­
husband, unless:

• consider whether you have a telephone listing in
your own name, because this would discriminate
against married women.

— you’re relying on income from alimony or on
community property to support your application.

• consider your sex as a factor in deciding whether
you are a good credit risk.

• require a co-signer or the signature of your spouse
just because you are a woman or married (with
certain exceptions when property rights are in­
volved).

• use your marital status to discriminate against you.
However, there are some closely related questions that
are permitted. In order to estimate your expenses, a credi­
tor may ask how many children you have, their ages, and
the cost of caring for them, as well as about your obliga­
tions to pay alimony, child support, or maintenance. A
creditor may ask how regularly you receive your alimony
payments, or whether they are made under court order,
in order to determine whether these payments are a de­
pendable source of income. You may be asked whether
there is a telephone in your home.
And finally, a creditor may consider your marital status
because, under the laws of your State, there may be dif­
ferences in the property rights of married and unmarried
people. Such differences may affect the creditor’s ability
to collect if you default.

— you’re relying on his income
— he’ll use the account or be liable for it

If your marital status changes, a creditor may not re­
quire you to reapply for credit, change the terms of your
account, or close your account, unless there is some indi­
cation that you are no longer willing or able to repay your
debt. A creditor may ask you to reapply if your ex­
husband’s income was counted to support your credit.

— Establishing a Credit —
___
History
Married women often have had trouble establishing credit
records because all debts were listed in their husbands’
names. A new rule will help women build up their own
credit records.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102