Full text of Equal Credit Opportunity Act Amendments of 1976

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PUBLIC LAW 94-239—MAR. 23, 1976

90 STAT. 251

Public Law 94-239
94th Congress
An Act
To amend title VII of the (Consumer Credit Protection Act to include discrimination on the basis of race, color, religion, national origin, and age, and for
other purposes.

Be it enacted hy the Senate and House of Representatives of the
United States of America in Congress assenibled^ That (a) this Act
may be cited as the "Equal Credit Opportunity Act Amendments of
1976".
(b) Title V I I of the Consumer Credit Protection Act is amended
by adding at the end thereof the following new section:
Ǥ 709. Short title
"This title may be cited as the 'Equal Credit Opportunity Act'."
(c) Section 501 of Public Law 93-4:95 is repealed.
SEC. 2. Section 701 of the Equal Credit Opportunity Act is amended
to read as follows:
"§ 701. Prohibited discrimination; reasons for adverse action
"(a) 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 the Consumer Credit Protection Act.
"(b) It shall not constitute discrimination for purposes of this title
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;
"(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 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) 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;

Mar. 23, 1976
[H.R. 6516]

Equal Credit
Opportunity Act
Amendments of
1976.
15 u s e 1691
note.
Equal Credit
Opportunity Act.

15 use 1691
note.
Repeal.
15 use 1691
note.
15 use 1691.

15 use 1601
note.

90 STAT. 252

PUBLIC LAW 94-239—MAR. 23, 1976

" (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 profitm a k i n g organization to meet special social needs which meets
standards prescribed in regulations by the B o a r d ;
if such refusal is required by or made pursuant to such program.
" ( d ) ( 1 ) W i t h i n t h i r t y days (or such longei reasonable time as
Notice.
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.
Statement of
" ( 2 ) E a c h applicant against whom adverse action is taken shall be
reasons.
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 t a k e n ; or
" ( B ) giving written notification of adverse action which discloses (i) the applicant's r i g h t to a statement of reasons within
t h i r t y 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 t h i r d p a r t y 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
t h i r d p a r t y , provided in either case that the identity of the creditor is
disclosed.
" ( 5 ) The requirements of p a r a g r a p h ( 2 ) , ( 3 ) , or (4) may be satisfied by verbal statements or notifications in the case of any creditor
who did not act on more t h a n one hundred and fifty applications
d u r i n g the calendar year preceding the calendar year in which the
adverse action is taken, as determined under regulations of the Board.
"Adverse
" ( 6 ) F o r purposes of this subsection, the term 'adverse action'
action."
means a denial or revocation of credit, a change in the terms of an
existing credit arrangement, or a refusal to g r a n t 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.".
SEC. 3. (a) Section 703 of t h e E q u a l Credit Opportunity Act is
15 use 1691b.
amended—
(1) by inserting " ( a ) " immediately before " T h e B o a r d " ;
(2) by inserting after the second sentence thereof the following
new sentence: " I n particular, such regulations may exempt from
one or more of the provisions of this title any class of transactions
not primarily for personal, family, or household purposes, if the
Board makes an express finding that the application of such provision or provisions would not contribute substantially to carrying out the purposes of this title."; and
(3) by adding at the end thereof the following new subsection:
Consumer
" ( b ) The Board shall establish a Consumer Advisory Council to
Advisory Council. advise and consult with it in the exercise of its functions under the
Establishment.

PUBLIC LAW 94-239—MAR. 23, 1976
Consumer Credit Protection Act and to advise and consult with it
concerning other consumer related matters it may place before the
Council. I n appointing the members of the Council, the Board shall
seek to achieve a fair representation of the interests of creditors and
consumers. The Council shall meet from time to time at the call of the
Board. Members of the Council who are not regular full-time employees of the United States shall, while attending meetings of such Council, be entitled to receive compensation at a rate fixed by the Board,
but not exceeding $100 per day, including travel time. Such members
may be allowed travel expenses, including transportation and subsistence, while away from their homes or regular place of business.".
(b) (1) Section 110 of the T r u t h in Lending Act is repealed.
(2) T h e table of sections of chapter 1 of such Act is amended by
striking out item 110.
SEC. 4. Section 704(c) of the Equal Credit O p p o r t u n i t y Act is
amended by inserting before the period at the end thereof the followi n g : ", including the power to enforce any Federal Reserve Board
regulation promulgated under this title in the same manner as if the
violation had been a violation of a Federal T r a d e Commission trade
regulation rule".
SEC. 5. Section 705 of the Equal Credit Opportunity Act is
amended—
(1) by amending subsection (e) to read as follows:
" ( e ) Where the same act or omission constitutes a violation of this
title and of applicable State law, a person aggrieved by such conduct
may b r i n g a legal action to recover monetary damages either under
this title or under such State law, but not both. This election of
remedies shall not apply to court actions in which the relief sought
does not include monetary damages or to administrative actions.";
and
(2) by adding the following new subsections:
" ( f ) This title does not annul, alter, or affect, or exempt any person
subject to the provisions of this title from complying with, the laws
of any State with respect to credit discrimination, except to the extent
that those laws are inconsistent with any provision of this title, and
then only to the extent of the inconsistency. The Board is authorized
to determine whether such inconsistencies exist. The Board may not
determine that any State law is inconsistent with any provision of this
title if the Board determines t h a t such law gives greater protection
to the applicant.
" ( g ) The Board shall by regulation exempt from the requirements
of sections 701 and 702 of this title any class of credit transactions
within any State if it determines that under the law of t h a t State
tliat class of transactions is subject to requirements substantially similar to those imposed under this title or that such law gives greater
protection to the applicant, and that there is adequate provision for
enforcement. Failure to comply with any requirement of such State
law in any transaction so exempted shall constitute a violation of this
title for the purposes of section 706.".
SEC. 6. Section 706 of the E q u a l Credit O p p o r t u n i t y Act is amended
to read as follows:
Ǥ 706. Civil liability
" ( a ) A n y creditor who fails to comply with any requirement
imposed under this title shall be liable to the aggrieved applicant for
any actual damages sustained by such applicant acting either in an
individual capacity or as a member of a class.
" ( b ) A n y creditor, other than a government or governmental sub-

90 STAT. 253

15 use 1601
note.

Repeal.
15 u s e 1609.
15 u s e 1601 et
seq.
15 u s e 1691c.

15 u s e 1691d.

15 u s e 1691,
1691a.

Infra.

15 u s e 1691e.

90 STAT. 254

15 use 1691c.

15 use 1691.

42 use 3605.

PUBLIC LAW 94-239—MAR. 23, 1976
division or agency, who fails to comply with any requirement imposed
under this title shall be liable to the aggrieved applicant for punitive
damages in an amount not greater than $10,000, in addition to any
actual damages provided in subsection (a), except that in the case of a
class action the total recovery under this subsection shall not exceed
the lesser of $500,000 or 1 per centum of the net worth of the creditor.
In determining the amount of such damages in any action, the court
shall consider, among other relevant factors, the amount of any actual
damages awarded, the frequency and persistence of failures of compliance by the creditor, the resources of the creditor, the number of
persons adversely aflfected, and the extent to which the creditor's failure of compliance was intentional.
"(c) Upon application by an aggrieved applicant, the appropriate
United States district court or any other court of competent jurisdiction may grant such equitable and declaratory relief as is necessary
to enforce the requirements imposed under this title.
"(d) In the case of any successful action under subsection (a), (b),
or (c), the costs of the action, together with a reasonable attorney's
fee as determined by the court, shall be added to any damages awarded
by the court under such subsection.
"(e) No provision of this title imposing liability shall apply to any
act done or omitted in good faith in conformity with any official rule,
regulation, or interpretation thereof by the Board or in conformity
with any interpretation or approval by an official or employee of the
Federal Reserve System duly authorized by the Board to issue such
interpretations or approvals under such procedures as the Board may
prescribe therefor, notwithstanding that after such act or omission
has occurred, such rule, regulation, interpretation, or approval is
amended, rescinded, or determined by judicial or other authority to be
invalid for any reason.
"(f) Any action under this section may be brought in the appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction. No such
action shall be brought later than two years from the date of the
occurrence of the violation, except that—
"(1) whenever any agency having responsibility for administrative enforcement under section 704 commences an enforcement
proceeding within two years from the date of the occurrence of
the violation,
"(2) whenever the Attorney General commences a civil action
under this section within two years from the date of the occurrence of the violation,
then any applicant who has been a victim of the discrimination which
is the subject of such proceeding or civil action may bring an action
under this section not later than one year after the commencement of
that proceeding or action.
"(g) The agencies having responsibility for administrative enforcement under section 704, if unable to obtain compliance with section 701, are authorized to refer the matter to the Attorney General
with a recommendation that an appropriate civil action be instituted.
"(h) When a matter is referred to the Attorney General pursuant
to subsection (g), or whenever he has reason to believe that one or
more creditors are engaged in a pattern or practice in violation of this
title, the Attorney General may bring a civil action in any appropriate
United States district court for such relief as may be appropriate,
including injunctive relief.
"(i) No person aggrieved by a violation of this title and by a
violation of section 805 of the Civil Rights Act of 1968 shall recover

PUBLIC LAW 94-239—MAR. 23, 1976

90 STAT. 255

under this title and section 812 of the Civil Rights Act of 1968, if 42 use 3612.
such violation is based on the same transaction.
"(j) Nothing in this title shall be construed to prohibit the discovery of a creditor's credit granting standards under appropriate
discovery procedures in the court or agency in which an action or
proceeding is brought,".
SEC. 7. The Equal Credit Opportunity Act is amended by redesignating section 707 as section 708 and by inserting immediately after 15 use 1691
note.
section 706 the following new section:
15 u s e 1691e.
"§ 707. Annual reports to Congress
15 u s e 1691f.
"Not later than February 1 of each year after 1976, the Board and
the Attorney General shall, respectively, make reports to the Congress concerning the administration of their functions under this title,
including such recommendations as the Board and the Attorney
General, respectively, deem necessary or appropriate. In addition, each
report of the Board shall include its assessment of the extent to which
compliance with the requirements of this title is being achieved, and
a summary of the enforcement actions taken by each of the agencies
assigned administrative enforcement responsibilities under section
704.".
SEC. 8. Section 708 of the Equal Credit Opportunity Act is amended Effective dates.
by adding at the end thereof the following new sentence: "The amend- 15 u s e 1691
ments made by the Equal Credit Opportunity Act Amendments of note.
1976 shall take effect on the date of enactment thereof 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 shall Ante, p. 251.
15 u s e 1691.
take effect 12 months after the date of enactment.".
SEC. 9. The table of sections of the Equal Credit Opportunity Act
is amended by striking out
"707. Effective date."

and inserting in lieu thereof the following new items:
"707. Annual reports to Congress.
"708. Effective date.
"709. Short title.".

Approved March 23, 1976.

LEGISLATIVE HISTORY:
HOUSE REPORTS: No. 94-210 (eomm. on Banking, eurrency and Housing) and No.
94-873 (eomm. of eonference).
SENATE REPORT No. 94-589 (eomm. on Banking, Housing and Urban Affairs).
eONGRESSIONAL REeORD:
VoL 121 (1975): June 3, considered and passed House.
VoL 122 (1976): Feb. 2, considered and passed Senate, amended.
Mar. 9, Senate and House agreed to conference report.
WEEKLY eOMPILATION OF PRESIDENTIAL DOeUMENTS:
Vol. 12, No. 13 (1976): Mar. 23, Presidential statement.

89-194 O—78—pt. 1

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