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6000 - Consumer Protection


TITLE VII—EQUAL CREDIT OPPORTUNITY

Sec.

701. Scope of prohibition.
702. Definitions; rules of construction.
703. Regulations.
704. Administrative enforcement.
704A. Incentives for self-testing and self-correction.
705. Applicability of other laws.
706. Civil liability.
707. Annual reports to Congress.
708. Effective date.
709. Short title.

§ 701.  Scope of prohibition

(a)  ACTIVITIES CONSTITUTING DISCRIMINATION.--It shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction--

(1)  on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract);

(2)  because all or part of the applicant's income derives from any public assistance program; or

(3)  because the applicant has in good faith exercised any right under the Consumer Credit Protection Act.

(b)  ACTIVITIES NOT CONSTITUTING DISCRIMINATION.--It shall not constitute discrimination for purposes of this title for a creditor--

(1)  to make an inquiry of marital status if such inquiry is for the purpose of ascertaining the creditor's rights and remedies applicable to the particular extension of credit and not to discriminate in a determination of credit-worthiness;

(2)  to make an inquiry of the applicant's age or of whether the applicant's income derives from any public assistance program if such inquiry is for the purpose of determining the amount and probable continuance of income levels, credit history, or other pertinent element of credit-worthiness as provided in regulations of the Bureau;

(3)  to use any empirically derived credit system which considers age if such system is demonstrably and statistically sound in accordance with regulations of the Bureau, except that in the operation of such system the age of an elderly applicant may not be assigned a negative factor or value;

(4)  to make an inquiry or to consider the age of an elderly applicant when the age of such applicant is to be used by the creditor in the extension of credit in favor of such applicant; or

(5)  to make an inquiry under section 704B, in accordance with the requirements of that section.

(c)  ADDITIONAL ACTIVITIES NOT CONSTITUTING DISCRIMINATION.--

It is not a violation of this section for a creditor to refuse to extend credit offered pursuant to--

(1)  any credit assistance program expressly authorized by law for an economically disadvantaged class of persons;

(2)  any credit assistance program administered by a nonprofit organization for its members or an economically disadvantaged class of persons; or

(3)  any special purpose credit program offered by a profit-making organization to meet special social needs which meets standards prescribed in regulations by the Bureau;

if such refusal is required by or made pursuant to such program.

(d)  REASON FOR ADVERSE ACTION; PROCEDURE APPLICABLE; ``ADVERSE ACTION'' DEFINED.--

(1)  Within thirty days (or such longer reasonable time as specified in regulations of the Bureau for any class of credit transaction) after receipt of a completed application for credit, a creditor shall notify the applicant of its action on the application.

(2)  Each applicant against whom adverse action is taken shall be entitled to a state- ment of reasons for such action from the creditor. A creditor satisfies this obligation by--

(A)  providing statements of reasons in writing as a matter of course to applicants against whom adverse action is taken; or

(B)  giving written notification of adverse action which discloses (i) the applicant's right to a statement of reasons within thirty days after receipt by the creditor of a request made within sixty days after such notification, and (ii) the identity of the persons or office from which such statement may be obtained. Such statement may be given orally if the written notification advises the applicant of his right to have the statement of reasons confirmed in writing on written request.

(3)  A statement of reasons meets the requirements of this section only if it contains the specific reasons for the adverse action taken.

(4)  Where a creditor has been requested by a third party to make a specific extension of credit directly or indirectly to an applicant, the notification and statement of reasons required by this subsection may be made directly by such creditor, or indirectly through the third party, provided in either case that the identity of the creditor is disclosed.

(5)  The requirements of paragraph (2), (3), or (4) may be satisfied by verbal statements or notifications in the case of any creditor who did not act on more than one hundred and fifty applications during the calendar year preceding the calendar year in which the adverse action is taken, as determined under regulations of the Bureau.

(6)  For purposes of this subsection, the term "adverse action" means a denial or revocation of credit, a change in the terms of an existing credit arrangement, or a refusal to grant credit in substantially the amount or on substantially the terms requested. Such term does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is delinquent or otherwise in default, or where such additional credit would exceed a previously established credit limit.

(e)  COPIES FURNISHED TO APPLICANTS.--

(1)  IN GENERAL.--Each creditor shall furnish to an applicant a copy of any and all written appraisals and valuations developed in connection with the applicant's application for a loan that is secured or would have been secured by a first lien on a dwelling promptly upon completion, but in no case later than 3 days prior to the closing of the loan, whether the creditor grants or denies the applicant's request for credit or the application is incomplete or withdrawn.

(2)  WAIVER.--The applicant may waive the 3 day requirement provided for in paragraph (1), except where otherwise required in law.

(3)  REIMBURSEMENT.--The applicant may be required to pay a reasonable fee to reimburse the creditor for the cost of the appraisal, except where otherwise required in law.

(4)  FREE COPY.--Notwithstanding paragraph (3), the creditor shall provide a copy of each written appraisal or valuation at no additional cost to the applicant.

(5)  NOTIFICATION TO APPLICANTS.--At the time of application, the creditor shall notify an applicant in writing of the right to receive a copy of each written appraisal and valuation under this subsection.

(6)  VALUATION DEFINED.--For purposes of this subsection, the term "valuation" shall include any estimate of the value of a dwelling developed in connection with a creditor's decision to provide credit, including those values developed pursuant to a policy of a government sponsored enterprise or by an automated valuation model, a broker price opinion, or other methodology or mechanism.

[Codified to 15 U.S.C. 1691]

[Source:  Section 701 of title VII of the Act of May 29, 1968 (Pub. L. No. 90--321), as added by section 503 of title V of the Act of October 28, 1974 (Pub. L. No. 93--495; 88 Stat. 1521), effective October 28, 1975, as amended by section 2 of the Act of March 23, 1976 (Pub. L. No. 94--239; 90 Stat. 251), effective March 23, 1977; section 223(d) of title II of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2306), effective December 19, 1991; section 1071(b) of title X of the Act of July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 2059), effective July 21, 2011; section 1085(1) and (2) of title X of the Act of July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 2083), effective July 21, 2010; section 1474 of title XIV of the Act of July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 2199), effective July 21, 2010]

NOTES

Findings and purpose.  Section 502 of title V of the Act of October 28, 1974 provides as follows:

§ 502.  Findings and purpose

The Congress finds that there is a need to insure that the various financial institutions and other firms engaged in the extensions of credit exercise their responsibility to make credit available with fairness, impartiality, and without discrimination on the basis of sex or marital status. Economic stabilization would be enhanced and compe-tition among the various financial institutions and other firms engaged in the extension of credit would be strengthened by an absence of discrimination on the basis of sex or marital status, as well as by the informed use of credit which Congress has heretofore sought to promote. It is the purpose of this [Equal Credit Opportunity] Act to require that financial institutions and other firms engaged in the extension of credit make that credit equally available to all creditworthy customers without regard to sex or marital status.

§ 702.  Definitions; rules of construction

(a)  The definitions and rules of construction set forth in this section are applicable for the purposes of this title.

(b)  The term "applicant" means any person who applies to a creditor directly for an extension, renewal, or continuation of credit, or applies to a creditor indirectly by use of an existing credit plan for an amount exceeding a previously established credit limit.

(c)  The term "Bureau" means the Bureau of Consumer Financial Protection.

(d)  The term "credit" means the right granted by a creditor to a debtor to defer payment of debt or to incur debts and defer its payment or to purchase property or services and defer payment therefor.

(e)  The term "creditor" means any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit.

(f)  The term "person" means a natural person, a corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association.

(g)  Any reference to any requirement imposed under this title or any provision thereof includes reference to the regulations of the Bureau under this title or the provision thereof in question.

[Codified to 15 U.S.C. 1691a]


[Source:  Section 702 of title VII of the Act of May 29, 1968 (Pub. L. No. 90--321), as added by section 503 of title V of the Act of October 28, 1974 (Pub. L. No. 93--495; 88 Stat. 1522), effective October 28, 1975; section 1085(1) of title X of the Act of July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 2083), effective July 21, 2010]

§ 703.  Promulgation of Regulations by the Bureau.

(a)  The Bureau shall prescribe regulations to carry out the purposes of this title. These regulations may contain but are not limited to such classifications, differentiation, or other provision, and may provide for such adjustments and exceptions for any class of transactions, as in the judgment of the Bureau are necessary or proper to effectuate the purposes of this title, to prevent circumvention or evasion thereof, or to facilitate or substantiate compliance therewith.

(b)  Such regulations may exempt from the provisions of this title any class of transactions that are not primarily for personal, family, or household purposes, or business or commercial loans made available by a financial institution, except that a particular type within a class of such transactions may be exempted if the Bureau determines, after making an express finding that the application of this title or of any provision of this title of such transaction would not contribute substantially to effecting the purposes of this title.

(c)  An exemption granted pursuant to subsection (b) shall be for no longer than five years and shall be extended only if the Bureau makes a subsequent determination, in the manner described by such paragraph, that such exemption remains appropriate.

(d)  Pursuant to Bureau regulations, entities making business or commercial loans shall maintain such records or other data relating to such loans as may be necessary to evidence compliance with this subsection or enforce any action pursuant to the authority of this Act. In no event shall such records or data be maintained for a period of less than one year. The Bureau shall promulgate regulations to implement this paragraph in the manner prescribed by chapter 5 of title 5, United States Code.

(e)  The Bureau shall provide in regulations that an applicant for a business or commercial loan shall be provided a written notice of such applicant's right to receive a written statement of the reasons for the denial of such loan.

(f)  BOARD AUTHORITY.--Notwithstanding subsection (a), the Board shall prescribe regulations to carry out the purposes of this title with respect to a person described in section 1029(a) of the Consumer Financial Protection Act of 2010. These regulations may contain but are not limited to such classifications, differentiation, or other provision, and may provide for such adjustments and exceptions for any class of transactions, as in the judgment of the Board are necessary or proper to effectuate the purposes of this title, to prevent circumvention or evasion thereof, or to facilitate or substantiate compliance therewith.

(g)  DEFERENCE.--Notwithstanding any power granted to any Federal agency under this title, the deference that a court affords to a Federal agency with respect to a determination made by such agency relating to the meaning or interpretation of any provision of this title that is subject to the jurisdiction of such agency shall be applied as if that agency were the only agency authorized to apply, enforce, interpret, or administer the provisions of this title.

[Codified to 15 U.S.C. 1691b]

[Source:  Section 703 of title VII of the Act of May 29, 1968 (Pub. L. No. 90--321), as added by section 503 of title V of the Act of October 28, 1974 (Pub. L. No. 93--495; 88 Stat. 1522), effective October 28, 1975, as amended by section 3 of the Act of March 23, 1976 (Pub. L. No. 94--239; 90 Stat. 252), effective March 23, 1976; section 301 of title III of the Act of October 25, 1988 (Pub. L. No. 100--533; 102 Stat. 2692), effective October 25, 1988; section 1085(1) and (3) of title X of the Act of July 21, 2010 (Pub. L. No. 111--203; 124 Stat, 2083), effective July 21, 2010]

§ 704.  Administrative enforcement

(a)  ENFORCING AGENCIES.--Subject to subtitle B of the Consumer Protection Financial Protection Act of 2010 with the requirements imposed under this title shall be enforced under:

(1)  section 8 of the Federal Deposit Insurance Act, by the appropriate Federal banking agency, as defined in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with respect to--

(A)  national banks, Federal savings associations, and Federal branches and Federal agencies of foreign banks;

(B)  member banks of the Federal Reserve System (other than national banks), branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act; and

(C)  banks and State savings associations insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System), and insured State branches of foreign banks;

(2)  The Federal Credit Union Act, by the Administrator of the National Credit Union Administration with respect to any Federal Credit Union.

(3)  The Acts to regulate commerce, by the Secretary of Transportation, with respect to all carriers subject to the jurisdiction of the Surface Transportation Board.

(4)  The Federal Aviation Act of 1958, by the Civil Aeronautics Board with respect to any carrier or foreign air carrier subject to that Act.

(5)  The Packers and Stockyards Act, 1921 (except as provided in section 406 of that Act), by the Secretary of Agriculture with respect to any activities subject to that Act.

(6)  The Farm Credit Act of 1971, by the Farm Credit Administration with respect to any Federal land bank, Federal land bank association, Federal intermediate credit bank, and production credit association;

(7)  The Securities Exchange Act of 1934, by the Securities and Exchange Commission with respect to brokers and dealers;

(8)  The Small Business Investment Act of 1958, by the Small Business Administration, with respect to small business investment companies; and

(9)  Subtitle E of the Consumer Financial Protection Act of 2010, by the Bureau, with respect to any person subject to this title.

The terms used in paragraph (1) that are not defined in this title or otherwise defined in section 3(s) of the Federal Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the meaning given to them in section 1(b) of the International Banking Act of 1978 (12 U.S.C. 3101).

(b)  VIOLATION OF SUBCHAPTER DEEMED VIOLATIONS OF PRE-EXISTING STATUTORY REQUIREMENTS; ADDITIONAL AGENCY POWERS.--For the purpose of the exercise by any agency referred to in subsection (a) of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this title shall be deemed to be a violation of a requirement imposed under that Act. In addition to its powers under any provision of law specifically referred to in subsection (a), each of the agencies referred to in that subsection may exercise for the purpose of enforcing compliance with any requirement imposed under this title, any other authority conferred on it by law. The exercise of the authorities of any of the agencies referred to in subsection (a) for the purpose of enforcing compliance with any requirement imposed under this title shall in no way preclude the exercise of such authorities for the purpose of enforcing compliance with any other provision of law not relating to the prohibition of discrimination on the basis of sex or marital status with respect to any aspect of a credit transaction.

(c)  RULES AND REGULATIONS BY ENFORCING AGENCIES.—OVERALL ENFORCEMENT AUTHORITY OF FEDERAL TRADE COMMISSION.--Except to the extent that enforcement of the requirements imposed under this title is specifically committed to some other Government agency under any of paragraphs (1) through (8) of subsection (a), and subject to subtitle B of the Consumer Financial Protection Act of 2010, the Federal Trade Commission shall be authorized to enforce such requirements. For the purpose of the exercise by the Federal Trade Commission of its functions and powers under the Federal Trade Commission Act (15 U.S.C. 41 et seq.), a violation of any requirement imposed under this subchapter shall be deemed a violation of a requirement imposed under that Act. All of the functions and powers of the Federal Trade Commission under the Federal Trade Commission Act are available to the Federal Trade Commission to enforce compliance by any person with the requirements imposed under this title, irrespective of whether that person is engaged in commerce or meets any other jurisdictional tests under the Federal Trade Commission Act, including the power to enforce any rule prescribed by the Bureau under this title in the same manner as if the violation had been a violation of a Federal Trade Commission trade regulation rule.

(d)  The authority of the Bureau to issue regulations under this title does not impair the authority of any other agency designated in this section to make rules respecting its own procedures in enforcing compliance with requirements imposed under this title.

[Codified to 15 U.S.C. 1691c]

[Source:  Section 704 of title VII of the Act of May 29, 1968 (Pub. L. No. 90--321), as added by section 503 of title V of the Act of October 28, 1974 (Pub. L. No. 93--495; 88 Stat. 1522), effective October 28, 1975, and as amended by section 4 of the Act of March 23, 1976 (Pub. L. No. 94--239; 90 Stat. 253), effective March 23, 1976; section 744(m) of title VII of the Act of August 9, 1989 (Pub. L. No. 101--73; 103 Stat. 439), effective August 9, 1989; section 212(d) of title II of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2301), effective December 19, 1991; section 1604(a)(8) of title XVI of the Act of October 28, 1992 (Pub. L. No. 102--550, 106 Stat. 4082), effective December 19, 1991; section 315 of title III of the Act of December 29, 1995 (Pub. L. No. 104--88; 109 Stat. 948), effective December 29, 1995; section 1085(4) of title X of the Act of July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 2084), effective July 21, 2010]

§ 704A. Incentives for self-testing and self-correction.

(a)  PRIVILEGED INFORMATION.--

(1)  CONDITIONS FOR PRIVILEGE.--A report or result of a self-test (as that term is defined by regulations of the Bureau) shall be considered to be privileged under paragraph (2) if a creditor--

(A)  conducts, or authorizes an independent third party to conduct, a self-test of any aspect of a credit transaction by a creditor, in order to determine the level or effectiveness of compliance with this title by the creditor; and

(B)  has identified any possible violation of this title by the creditor and has taken, or is taking, appropriate corrective action to address any such possible violation.

(2)  PRIVILEGED SELF-TEST.--If a creditor meets the conditions specified in subparagraphs (A) and (B) of paragraph (1) with respect to a self-test described in that paragraph, any report or results of that self-test--

(A)  shall be privileged; and

(B)  may not be obtained or used by any applicant, department, or agency in any--

(i)  proceeding or civil action in which one or more violations of this title are alleged; or

(ii)  examination or investigation relating to compliance with this title.

(b)  RESULTS OF SELF-TESTING.--

(1)  IN GENERAL.--No provision of this section may be construed to prevent an applicant, department, or agency from obtaining or using a report or results of any self-test in any proceeding or civil action in which a violation of this title is alleged, or in any examination or investigation of compliance with this title if--

(A)  the creditor or any person with lawful access to the report or results--

(i)  voluntarily releases or discloses all, or any part of, the report or results to the applicant, department, or agency, or to the general public; or

(ii)  refers to or describes the report or results as a defense to charges of violations of this title against the creditor to whom the self-test relates; or

(B)  the report or results are sought in conjunction with an adjudication or admission of a violation of this title for the sole purpose of determining an appropriate penalty or remedy.

(2)  DISCLOSURE FOR DETERMINATION OF PENALTY OR REMEDY.--Any report or results of a self-test that are disclosed for the purpose specified in paragraph (1)(B)--

(A)  shall be used only for the particular proceeding in which the adjudication or admission referred to in paragraph (1)(B) is made; and

(B)  may not be used in any other action or proceeding.

(c)  ADJUDICATION.--An applicant, department, or agency that challenges a privilege asserted under this section may seek a determination of the existence and application of that privilege in--

(1)  a court of competent jurisdiction; or

(2)  an administrative law proceeding with appropriate jurisdiction.

[Codified to 15 U.S.C. 1691c-1]

[Section 704 of title VII of the Act of May 29, 1968 (Pub. L. No. 90-321), as added by section 2302 of title II of the Act of September 30, 1996 (Pub. L. No. 104-208; 110 Stat. 3009-420), effective September 30, 1996; section 1085(1) of the Act of July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 2083), effective July 21, 2010]

§ 704B.  SMALL BUSINESS LOAN DATA COLLECTION.

(a)  PURPOSE.--The purpose of this section is to facilitate enforcement of fair lending laws and enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned, and small businesses.

(b)  INFORMATION GATHERING.--Subject to the requirements of this section, in the case of any application to a financial institution for credit for women-owned, minority-owned, or small business, the financial institution shall-

(1) inquire whether the business is a women-owned, minority-owned, or small business, without regard to whether such application is received in person, by mail, by telephone, by electronic mail or other form of electronic transmission, or by any other means, and whether or not such application is in response to a solicitation by the financial institution; and

(2) maintain a record of the responses to such inquiry, separate from the application and accompanying information.

(c)  RIGHT TO REFUSE.--Any applicant for credit may refuse to provide any information requested pursuant to subsection (b) in connection with any application for credit.

(d)  NO ACCESS BY UNDERWRITERS.--

(1)  LIMITATION.--Where feasible, no loan underwriter or other officer or employee of a financial institution, or any affiliate of a financial institution, involved in making any determination concerning an application for credit shall have access to any information provided by the applicant pursuant to a request under subsection (b) in connection with such application.

(2)  LIMITED ACCESS.--If a financial institution determines that a loan underwriter or other officer or employee of a financial institution, or any affiliate of a financial institution, involved in making any determination concerning an application for credit should have access to any information provided by the applicant pursuant to a request under subsection (b), the financial institution shall provide notice to the applicant of the access of the underwriter to such information, along with notice that the financial institution may not discriminate on the basis of such information.

(e)  FORM AND MANNER OF INFORMATION.--

(1)  IN GENERAL.--Each financial institution shall compile and maintain, in accordance with regulations of the Bureau, a record of the information provided by any loan applicant pursuant to a request under subsection (b).

(2)  ITEMIZATION.--Information compiled and maintained under paragraph (1) shall be itemized in order to clearly and conspicuously disclose-

(A)  the number of the application and the date on which the application was received;

(B)  the type and purpose of the loan or other credit being applied for;

(C)  the amount of the credit or credit limit applied for, and the amount of the credit transaction or the credit limit approved for such applicant;

(D)  the type of action taken with respect to such application, and the date of such action;

(E)  the census tract in which is located the principal place of business of the women-owned, minority-owned, or small business loan applicant;

(F)  the gross annual revenue of the business in the last fiscal year of the women-owned, minority-owned, or small business loan applicant preceding the date of the application;

(G)  the race, sex, and ethnicity of the principal owners of the business; and

(H)  any additional data that the Bureau determines would aid in fulfilling the purposes of this section.

(3)  NO PERSONALLY IDENTIFIABLE INFORMATION.--In compiling and maintaining any record of information under this section, a financial institution may not include in such record the name, specific address (other than the census tract required under paragraph (1)(E))1 , telephone number, electronic mail address, or any other personally identifiable information concerning any individual who is, or is connected with, the women-owned, minority-owned, or small business loan applicant.

(4)  DISCRETION TO DELETE OR MODIFY PUBLICLY AVAILABLE DATA.--The Bureau may, at its discretion, delete or modify data collected under this section which is or will be available to the public, if the Bureau determines that the deletion or modification of the data would advance a privacy interest.

(f)  AVAILABILITY OF INFORMATION.--

(1)  SUBMISSION TO BUREAU.--The data required to be compiled and maintained under this section by any financial institution shall be submitted annually to the Bureau.

(2)  AVAILABILITY OF INFORMATION.--Information compiled and maintained under this section shall be--

(A)  retained for not less than 3 years after the date of preparation;

(B)  made available to any member of the public, upon request, in the form required under regulations prescribed by the Bureau;

(C)  annually made available to the public generally by the Bureau, in such form and in such manner as is determined by the Bureau, by regulation.

(3)  COMPILATION OF AGGREGATE DATA.--The Bureau may, at its discretion--

(A)  compile and aggregate data collected under this section for its own use; and

(B)  make public such compilations of aggregate data.

(g)  BUREAU ACTION.--

(1)  IN GENERAL.--The Bureau shall prescribe such rules and issue such guidance as may be necessary to carry out, enforce, and compile data pursuant to this section.

(2)  EXCEPTIONS.--The Bureau, by rule or order, may adopt exceptions to any requirement of this section and may, conditionally or unconditionally, exempt any financial institution or class of financial institutions from the requirements of this section, as the Bureau deems necessary or appropriate to carry out the purposes of this section.

(3)  GUIDANCE.--The Bureau shall issue guidance designed to facilitate compliance with the requirements of this section, including assisting financial institutions in working with applicants to determine whether the applicants are women-owned, minority-owned, or small businesses for purposes of this section.

(h)  DEFINITIONS.--For purposes of this section, the following definitions shall apply:

(1)  FINANCIAL INSTITUTION.--The term "financial institution" means any partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity that engages in any financial activity.

(2)  SMALL BUSINESS.--The term "small business" has the same meaning as the term "small business concern" in section 3 of the Small Business Act (15 U.S.C. 632).

(3)  SMALL BUSINESS LOAN.--The term "small business loan" means a loan made to a small business.

(4)  MINORITY.--The term "minority" has the same meaning as in section 1204(c)(3) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

(5)  MINORITY-OWNED BUSINESS.--The term "minority-owned business" means a business-

(A)  more than 50 percent of the ownership or control of which is held by 1 or more minority individuals; and

(B)  more than 50 percent of the net profit or loss of which accrues to 1 or more minority individuals.

(6)  WOMEN-OWNED BUSINESS.--The term "women-owned business" means a business-

(A)  more than 50 percent of the ownership or control of which is held by 1 or more women; and

(B)  more than 50 percent of the net profit or loss of which accrues to 1 or more women.

[Codified to 1 U.S.C. 1691c--2]

[Source: Section 704B added by section 1071(a) of title X of the Act of July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 2056), effective July 21, 2010]

§ 705.  Applicability of other laws

(a)  REQUEST FOR SIGNATURE OF HUSBAND AND WIFE FOR CREATION OF VALID LIEN, ETC.--A request for the signature of both parties to a marriage for the purpose of creating a valid lien, passing clear title, waiving inchoate rights to property, or assigning earnings, shall not constitute discrimination under this title: Provided, however, That this provision shall not be construed to permit a creditor to take sex or marital status into account in connection with the evaluation of creditworthiness of any applicant.

(b)  Consideration or application of State property laws directly or indirectly affecting creditworthiness shall not constitute discrimination for purposes of this title.

(c)  Any provision of State law which prohibits the separate extension of consumer credit to each party to a marriage shall not apply in any case where each party to a marriage voluntarily applies for separate credit from the same creditor: Provided, That in any case where such a State law is so preempted, each party to the marriage shall be solely responsible for the debt so contracted.

(d)  When each party to a marriage separately and voluntarily applies for and obtains separate credit accounts with the same creditor, those accounts shall not be aggregated or otherwise combined for purposes of determining permissible finance charges or permissible loan ceilings under the laws of any State or of the United States.

(e)  Where the same act or omission constitutes a violation of this title and of applicable State law, a person aggrieved by such conduct may bring a legal action to recover monetary damages either under this title or under such State law, but not both. This election of remedies shall not apply to court actions in which the relief sought does not include monetary damages or to administrative actions.

(f)  This title does not annul, alter, or affect, or exempt any peron subject to the provisions of this title from complying with, the laws of any State with respect to credit discrimination, except to the extent that those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. The Bureau is authorized to determine whether such inconsistencies exist. The Bureau may not determine that any State law is inconsistent with any provision of this title if the Bureau determines that such law gives greater protection to the applicant.

(g)  The Bureau shall by regulation exempt from the requirements of sections 701 and 702 of this title any class of credit transactions within any State if it determines that under the law of that State that class of transactions is subject to requirements substantially similar to those imposed under this title or that such law gives greater protection to the applicant, and that there is adequate provision for enforcement. Failure to comply with any requirement of such State law in any transaction so exempted shall constitute a violation of this title for the purposes of section 706.

[Codified to 15 U.S.C. 1691d]

[Source:  Section 705 of title VII of the Act of May 29, 1968 (Pub. L. No. 90--321), as added by section 503 of title V of the Act of October 28, 1974 (Pub. L. No. 93--495; 88 Stat. 1523), effective October 28, 1975, and as amended by section 5 of the Act of March 23, 1976 (Pub. L. No. 94--239; 90 Stat. 253), effective March 23, 1976; section 1085(1) of title X of the Act of July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 2056), effective July 21, 2010]

§ 706.  Civil liability

(a)  INDIVIDUAL OR CLASS ACTION FOR ACTUAL DAMAGES.--Any creditor who fails to comply with any requirement imposed under this title shall be liable to the aggrieved applicant for any actual damages subtained by such applicant acting either in an individual capacity or as a member of a class.

(b)  RECOVERY OF PUNITIVE DAMAGES IN INDIVIDUAL AND CLASS ACTION FOR ACTUAL DAMAGES; EXEMPTIONS; MAXIMUM AMOUNT OF PUNITIVE DAMAGES IN INDIVIDUAL ACTIONS; LIMITATION ON TOTAL RECOVERY IN CLASS ACTIONS; FACTORS DETERMINING AMOUNT OF AWARD.--Any creditor, other than a government or governmental subdivision or agency, who fails to comply with any requirement imposed under this title shall be liable to theaggrieved applicant for punitive damages in an amount not greater than $10,000, in addition to any actual damages provided in subsection (a), except that in the case of a class action the total recovery under this subsection shall not exceed the lesser of $500,000 or 1 per centum of the net worth of the creditor. In determining the amount of such damages in any action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of compliance by the creditor, the resources of the creditor, the number of persons adversely affected, and the extent to which the creditor's failure of compliance was intentional.

(c)  Upon application by an aggrieved applicant, the appropriate United States district court or any other court of competent jurisdiction may grant such equitable and declaratory relief as is necessary to enforce the requirements imposed under this title.

(d)  In the case of any successful action under subsection (a), (b), or (c), the costs of the action, together with a reasonable attorney's fee as determined by the court, shall be added to any damages awarded by the court under such subsection.

(e)  No provision of this title imposing liability shall apply to any act done or omitted in good faith in conformity with any official rule, regulation, or interpretation thereof by the Bureau or in conformity with any interpretation or approval by an official or employee of the Bureau of Consumer Financial Protection duly authorized by the Bureau to issue such interpretations or approvals under such procedures as the Bureau may prescribe therefor, notwithstanding that after such act or omission has occurred, such rule, regulation, interpretation, or approval is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

(f)  Any action under this section may be brought in the appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction. No such action shall be brought later than five years from the date of the occurrence of the violation, except that--

(1)  whenever any agency having responsibility for administrative enforcement under section 704 commences an enforcement proceeding within five years from the date of the occurrence of the violation,

(2)  whenever the Attorney General commences a civil action under this section within five years from the date of the occurrence of the violation, then any applicant who has been a victim of the discrimination which is the subject of such proceeding or civil action may bring an action under this section not later than one year after the commencement of that proceeding or action.

(g)  The agencies having responsibility for administrative enforcement under section 704, if unable to obtain compliance with section 701, are authorized to refer the matter to the Attorney General with a recommendation that an appropriate civil action be instituted. Each agency referred to in paragraphs (1), (2), and (9) of section 704(a) shall refer the matter to the Attorney General whenever the agency has reason to believe that 1 or more creditors has engaged in a pattern or practice of discouraging or denying applications for credit in violation of section 701(a). Each such agency may refer the matter to the Attorney General whenever the agency has reason to believe that 1 or more creditors has violated section 701(a).

(h)  When a matter is referred to the Attorney General pursuant to subsection (g), or whenever he has reason to believe that one or more creditors are engaged in a pattern or practice in violation of this title, the Attorney General may bring a civil action in any appropriate United States district court for such relief as may be appropriate, including actual and punitive damages and injunctive relief.

(i)  No person aggrieved by a violation of this title and by a violation of section 805 of the Civil Rights Act of 1968 shall recover under this title and section 812 of the Civil Rights Act of 1968, if such violation is based on the same transaction.

(j)  Nothing in this title shall be construed to prohibit the discovery of a creditor's credit granting standards under appropriate discovery procedures in the court or agency in which an action or proceeding is brought.

(k)  NOTICE TO HUD OF VIOLATIONS.--Whenever an agency referred to in paragraph (1), (2), or (3) of section 704(a)--

(1)  has reason to believe, as a result of receiving a consumer complaint, conducting a consumer compliance examination, or otherwise, that a violation of this title has occurred;

(2)  has reason to believe that the alleged violation would be a violation of the Fair Housing Act; and

(3)  does not refer the matter to the Attorney General pursuant to subsection (g), the agency shall notify the Secretary of Housing and Urban Development of the violation, and shall notify the applicant that the Secretary of Housing and Urban Development has been notified of the alleged violation and that remedies for the violation may be available under the Fair Housing Act.

[Codified to 15 U.S.C. 1691e]

[Source:  Section 706 of title VII of the Act of May 29, 1968 (Pub. L. No. 90--321), as added by section 503 of title V of the Act of October 28, 1974 (Pub. L. No. 93--495; 88 Stat. 1524), effective October 28, 1975, and as amended by section 6 of the Act of March 23, 1976 (Pub. L. No. 94--239; 90 Stat. 253), effective March 23, 1976; sections 223(a)--(c) of title II of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2306), effective December 19, 1991; section 1085(1), (5), (6), and (7) of title X of the Act of July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 2083 and 2085), effective July 21, 2010]

§ 707.  Annual reports to Congress

Each year, the Bureau and the Attorney General shall, respectively, make reports to the Congress concerning the administration of their functions under this title, including such recommendations as the Bureau and the Attorney General, respectively, deem necessary or appropriate. In addition, each report of the Bureau shall include its assessment of the extent to which compliance with the requirements of this title is being achieved, and a summary of the enforcement actions taken by each of the agencies assigned administrative enforcement responsibilities under section 704.

[Codified to 15 U.S.C. 1691f]

[Source:  Section 707 of title VII of the Act of May 29, 1968 (Pub. L. No. 90--321), as added by section 7 of the Act of March 23, 1976 (Pub. L. No. 94--239; 90 Stat. 255), effective March 23, 1976; as amended by section 610 of title VI of the Act of March 31, 1980 (Pub. L. No. 96--221; 94 Stat. 174), effective April 1, 1982; section 1085(1) of title X of the Act of July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 2085), effective July 21, 2010]

§ 708.  Effective date

This title takes effect upon the expiration of one year after the date of its enactment. The amendments made by the Equal Credit Opportunity Act Amendments of 1976 shall take effect on the date of enactment thereof and shall apply to any violation occurring on or after such date, except that the amendments made to section 701 of the Equal Credit Opportunity Act shall take effect 12 months after the date of enactment.

[Codified to 15 U.S.C. 1691 note]

[Source:  Section 708 (formerly 707) of title VII of the Act of May 29, 1968 (Pub. L. No. 90--321), as added by section 503 of title V of the Act of October 28, 1974 (Pub. L. No. 93--495; 88 Stat. 1525), effective October 28, 1975, as redesignated by section 7, and as amended by section 8, of the Act of March 23, 1976 (Pub. L. No. 94--239; 90 Stat. 255), effective March 23, 1976]

§ 709.  Short title

This title may be cited as the "Equal Credit Opportunity Act."

[Codified to 15 U.S.C. 1691 note]

[Source:  Section 709 of title VII of the Act of May 29, 1968 (Pub. L. No. 90--321), as added by section 1(b) of the Act of March 23, 1976 (Pub. L. No. 94--239; 90 Stat. 251), effective March 23, 1976]

1So in original. Probably should be "(2)(E)).". Go back to Text


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