# Equal Credit Opportunity Act The **Equal Credit Opportunity Act** (ECOA) is the federal law against discrimination in lending. President [[Gerald Ford]] signed it on **October 28, 1974**. As first passed, it barred lenders from discriminating "on the basis of sex or marital status with respect to any aspect of a credit transaction," which is why it is often remembered as the law that let married women get credit cards in their own names. In **1976** Congress reenacted it and added race, color, religion, national origin and age, plus protection for people whose income comes from public assistance. Its rules are known as **Regulation B**. ## Why it matters The [[Fair Housing Act of 1968]] covers mortgages; ECOA covers almost every kind of credit, including car loans, credit cards, small-business loans and student loans. Credit decisions are now made largely by scoring models and automated underwriting, where discrimination rarely shows up as intent and usually shows up as effect (see [[Statistical Discrimination]]). For nearly fifty years federal regulators applied an "effects test" under ECOA so that a neutral-looking lending rule with a discriminatory result could be challenged. In 2026 the federal government stopped doing that. ## How the law developed - **1974.** Passed as Title V of a broader banking bill. The Justice Department said at the time it "would have preferred" the law also covered race. - **1975–1977.** The [[Federal Reserve]] wrote the first rules, including a ban on *discouraging* people from applying. When it revised the rules in 1977 for the expanded 1976 law, it noted that Congress intended an "effects test" to apply, citing [[Griggs v. Duke Power Company]]. - **2011.** The [[Dodd-Frank Act]] moved ECOA rulemaking and enforcement to the new [[CFPB]], which republished Regulation B without substantive change. ## The 2026 rollback Following [[Executive Order 14281]], the CFPB proposed rewriting Regulation B on November 13, 2025, and finalized the rule on **April 22, 2026**, effective **July 21, 2026**. The final rule: - **Removes disparate-impact liability** from Regulation B, stating that ECOA does not authorize an "effects test." - **Narrows the ban on discouraging applicants** to explicit statements (words or images) that would lead a reasonable person to expect denial on a prohibited basis. Business decisions such as where to put branches or where to advertise are no longer covered. - **Restricts special purpose credit programs**, the lending programs aimed at underserved groups. Race, color, national origin and sex can no longer be used as eligibility criteria, and for-profit lenders must show each borrower would not otherwise have qualified. Twenty-one state attorneys general opposed the change in a joint comment letter, calling it "arbitrary and capricious." States such as New York and Illinois still allow disparate-impact claims under their own lending laws, and private plaintiffs may still argue that the statute itself allows them, since after [[Loper Bright v. Raimondo]] courts no longer defer to an agency's reading. ## Connections - [[Fair Housing Act of 1968]]: the housing counterpart. - [[Disparate Impact]] - [[Statistical Discrimination]] - [[Executive Order 14281]] - [[CFPB]]