Consumer Financial Protection Bureau (CFPB) officials recently detailed the agency’s issuance of an advisory opinion affirming the extent of loan borrower protections under the Equal Credit Opportunity Act (ECOA).
“The CFPB is ramping up its efforts to issue guidance and advisory opinions to assist entities with understanding their obligations under the law,” CFPB Director Rohit Chopra said – noting the advisory opinion and accompanying analysis clarifies anti-discrimination protections do not end once a customer obtains a loan.
The ECOA protects individuals and businesses against discrimination in accessing and using credit—barring lenders from discriminating against customers after receiving a loan, not just during the application process.
Per the advisory opinion, the ECOA protects borrowers after they have applied for and received credit, outlining lenders are prohibited from discriminating against borrowers with existing credit.
Additionally, the CFPB said the ECOA requires lenders to provide adverse action notices to borrowers with existing credit, explaining why an unfavorable decision was made against a borrower.
The CFPB noted adverse action notices discourage discrimination while aiding applicants and borrowers in learning the reasons for creditors’ decisions.
According to the CFPB, the ECOA has helped people obtain credit on fair terms for 48 years. The measure has provided people and businesses with discrimination protections when seeking, applying for, and using credit.