EQUAL CREDIT OPPORTUNITY ACT ECOA

A regulation created by the U.S. government that aims to give all legal individuals an equal opportunity to apply for loans from financial institutions and other loan granting organizations. Individuals cannot be discriminated upon via factors that are not directly related to their creditworthiness.

For example, individuals cannot be discriminated on the grounds of their racial background, religious background, sex and/or marital status.

The only accepted factors that can be used to determine whether or not an individual is acceptable for a loan are relevant financially related information such as one's credit score, income and existing debt load.

Organizations found in violation of this act could potentially face class-action suits. If found guilty, the offending organization could have to pay out punitive damages totaling up the lesser of $500,000 or 1% of the organization's net worth.