Loan Discrimination and Your Rights Under the Equal Credit Opportunity Act

Published by the Modern Lending Solutions editorial team. Last reviewed: October 30, 2026.

Short answer: under the Equal Credit Opportunity Act (ECOA), a lender may not treat you worse in any part of a credit deal because of your race, color, religion, national origin, sex, marital status or age (if you are old enough to sign a contract), because some of your income comes from a public assistance program, or because you used a right under federal consumer credit law in good faith. If you think a lender discriminated against you, the CFPB says you can file a complaint with the CFPB or the FTC. This is general information, not legal or financial advice.

What the law forbids

The Act says it is unlawful for any creditor to discriminate against any applicant “with respect to any aspect of a credit transaction” on these grounds (15 U.S.C. 1691(a), official U.S. Code text, read October 30, 2026):

Race, color, religion, national origin, sex or marital status.
Age, “provided the applicant has the capacity to contract”.
That all or part of your income “derives from any public assistance program”.
That you have “in good faith exercised any right” under the federal Consumer Credit Protection Act.

Regulation B repeats the rule: “A creditor shall not discriminate against an applicant on a prohibited basis regarding any aspect of a credit transaction” (12 CFR 1002.4(a), eCFR, text up to date as of October 28, 2026, read October 30, 2026). The list of prohibited grounds is in the definition of “prohibited basis” (12 CFR 1002.2(z), eCFR). A lender also may not make oral or written statements, in ads or otherwise, that it “knows or should know would cause a reasonable person to believe” it would deny you or offer worse terms on a prohibited basis (1002.4(b)).

The CFPB lists what that covers in practice: a creditor may not use these factors to refuse you credit if you qualify, discourage you from applying, give you terms different from someone in a similar situation, or close your existing account (CFPB, page last reviewed October 12, 2023 and last modified April 11, 2025, read October 30, 2026; check it for updates). The CFPB adds that the law applies to auto loans, credit cards, mortgages and student loans, among others.

How your income must be treated

Regulation B sets rules for income (12 CFR 1002.6(b)(5), eCFR):

A lender may not discount or leave out your income, or your spouse’s, because of a prohibited basis.
It may not discount or leave out income because it comes from part-time work, or is “an annuity, pension, or other retirement benefit”.
It may consider “the amount and probable continuance of any income”.
If you rely on alimony, child support or separate maintenance, the lender must count those payments as income “to the extent that they are likely to be consistently made”.

The CFPB says public assistance income includes Social Security and Supplemental Security Income (SSI), unemployment, TANF and SNAP (CFPB). A lender may ask about public assistance income only to find the amount and probable continuance of income, credit history or another pertinent element of creditworthiness (15 U.S.C. 1691(b)(2); 12 CFR 1002.6(b)(2)(iii)).

Example only for the math: the figures are example figures. With $2,400.00 a month from a part-time job, $900.00 from a public assistance program and $400.00 in child support that is likely to be paid consistently, the income in this example is $2,400.00 + $900.00 + $400.00 = $3,700.00 a month. Counting only the $2,400.00 job income just because the rest is benefits or child support would conflict with the rules above. A lender may still weigh how long each income is likely to continue.

The age rules

A lender may not take your age into account, if you can enter a binding contract, except in these ways (12 CFR 1002.6(b)(2)):

A credit scoring system that is “empirically derived, demonstrably and statistically sound” may use age, but “the age of an elderly applicant” may not be given a negative factor or value (1002.6(b)(2)(ii)).
In a judgmental review, age may be considered only to find a pertinent element of creditworthiness (1002.6(b)(2)(iii)).
Age may be used to favor an elderly applicant (1002.6(b)(2)(iv)).

For credit cards for people under 21, a separate income rule applies; see credit card rules for people under 21.

Other rules in 1002.6

Married and unmarried applicants must be judged by the same standards, and joint applicants may not be treated differently because of a marital relationship or its absence (1002.6(b)(8)).
A lender may not assume that a group of people will have children and lose income for that reason (1002.6(b)(3)).
If a lender looks at credit history, on your request it must consider information you give that shows the history does not reflect your creditworthiness (1002.6(b)(6)(ii)).
A lender may consider your immigration or permanent resident status (1002.6(b)(7)).

One change to know about: since an amendment published April 22, 2026 (91 FR 21668) and effective July 21, 2026, 1002.6(a) says “The Act does not provide that the ‘effects test’ applies for determining whether there is discrimination in violation of the Act.” The earlier text said Congress intended an effects test to apply. If you read older guides, check them against the current text.

If you were denied

If a lender turns you down, it must tell you why, or tell you how to ask for the reasons. See loan application denied: the adverse action notice. Keep that notice; the reasons it gives can help you judge whether a prohibited basis played a part.

How to complain

The CFPB says: “If you believe a lender discriminated against you, you can submit a complaint with the Federal Trade Commission (FTC) or with the CFPB online or by calling 1-855-411-CFPB (2372).” It also says that if you are in the military, you should report it to your installation JAG (CFPB). The CFPB complaint form is at consumerfinance.gov/complaint. For step-by-step help, see how to file a loan complaint. The CFPB page also notes that the law where you live may add more protected grounds.

You can also go to court. A creditor that breaks the Act is liable for actual damages, and a creditor other than a government agency may also owe punitive damages of up to $10,000 in an individual case (15 U.S.C. 1691e(a) and (b), official U.S. Code text). An action must be brought within 5 years of the violation, with some exceptions (1691e(f)). Talk to a lawyer about your case.

What to write down

The date you applied or asked about credit, and with whom you spoke.
What you were told, word for word if you can, and any ads or written statements.
The terms you were offered, and any notice of denial or reasons.
Your income sources and the amounts you listed on the application.

Checklist

Know the protected grounds in 1691(a).
Make sure all your income was counted, including benefits, part-time pay, retirement income and reliable support payments.
Read any adverse action notice and ask for reasons if none were given.
Keep records of what was said and offered.
File a complaint with the CFPB or the FTC if you think you were treated unfairly.

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Sources

Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.

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