ECOA Reg B Lending Compliance
United States
1974
Consumer Protection
Overview
The Equal Credit Opportunity Act (ECOA), implemented through Regulation B, prohibits discrimination in all aspects of credit transactions. Enacted in 1974, ECOA ensures that applicants receive fair and equal access to credit regardless of race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or exercise of consumer rights.Reg B applies to banks, credit unions, mortgage lenders, auto finance companies, BNPL platforms, and other creditors offering personal, commercial, or household credit. It also governs application processing, evaluation, adverse action notices, and recordkeeping. Financial institutions must implement comprehensive KYC compliance frameworks that ensure fair and unbiased customer verification processes while maintaining strict adherence to anti-discrimination requirements across all credit evaluation and decision-making procedures.
Key Obligations
- Prohibit discrimination in any part of a credit transaction
- Provide timely and clear adverse action notices to denied applicants
- Request only information relevant to creditworthiness (with limited exceptions)
- Retain records of credit applications and decisions for specified periods
- Offer spousal or co-applicant protections as required
- Train employees and review policies to ensure nondiscriminatory lending practices
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