Since the Consumer Financial Protection Bureau opened its doors in 2011, it has uncovered credit discrimination all over the country.
Part of the agency’s job is to enforce the Equal Credit Opportunity Act in concert with a number of other federal agencies, and the CFPB has actively taken on banks and lenders who violate that law. Unfortunately, some lenders have been pretty active in discriminating against borrowers based on race and national origin, among other factors.
Credit discrimination has been found at major banks and auto financiers
Discrimination in lending goes against everything America stands for, but it happens far too often. If you’re a woman, a person with a disability or a member of any minority group, you could be victimized. Unfortunately, it can be difficult to spot — and even more difficult to prove on your own.
The ECOA prohibits lenders from denying credit or offering less favorable terms to consumers, or engaging in practices like redlining, based on any of these factors:
- National Origin
- Marital status
- Age (applies to those 18 and over)
- Receipt of public assistance income
- Receipt of SSDI
- Exercising your consumer protection rights
- Lenders are also prohibited from credit discrimination against consumers with disabilities by the Fair Housing Act.
Nevertheless, in just the past five years the CFPB has brought major instances of credit discrimination to light that have affected hundreds of thousands of people of color. In a recent blog post, the agency cited BancorpSouth Bank, Ally Bank, Ally Financial, GE Capital (aka Synchrony Bank) and American Honda Finance Corporation for major violations of the Equal Credit Opportunity Act.
Protect yourself with information and skepticism
Before you decide to borrow money, it is essential to check and correct your credit report and to know your credit score. Understand what kind of credit offers you deserve and be prepared to shop around.
Discrimination may not be obvious, but the CFPB provides a few examples of behavior that could tip you off:
- You’re treated differently in person than you were on the phone
- Your application for a loan is declined even though you qualify
- You suspect you are being steered away from certain offers or types of loans
- You’re offered a higher rate than was advertised, or a lower rate is overruled by a supervisor
- The lender asks about, or you overhear negative comments about your race, national origin, marital status or other protected characteristics
If you suspect you have suffered from credit discrimination, a consumer protection lawyer can help you get to the bottom of it. Please don’t hesitate to reach out for help.