ECOA — Equal Credit Opportunity Act (Regulation B)
Master ECOA for the NMLS exam. Learn the 9 protected classes, adverse action notice requirements, spousal signature rules, and how ECOA differs from Fair Housing.
ECOA's 9 Protected Classes
Race
Color
Religion
National origin
Sex (including sexual orientation and gender identity)
Marital status
Age (provided the applicant has the capacity to enter into a contract)
Receipt of income from any public assistance program
Good-faith exercise of any right under the Consumer Credit Protection Act
Key ECOA Provisions
9 Protected Classes
ECOA prohibits discrimination in any aspect of a credit transaction based on 9 protected classes. Key difference from Fair Housing: ECOA includes marital status, age, and public assistance income; Fair Housing includes familial status and disability instead.
Adverse Action Notices
If a lender takes adverse action (denial, reduction, or unfavorable change in terms), they must provide written notice within 30 days. The notice must include: specific reasons for the action (or the right to request reasons within 60 days), the applicant's right to obtain their credit report, and the credit reporting agency's contact information.
Spousal Signature Rules
A lender CANNOT require a spouse's signature on a loan application solely because the applicant is married. A spouse's signature may only be required if: the spouse is a co-borrower, the spouse's income is needed to qualify, or the spouse's property is pledged as collateral (in community property states).
Income from Public Assistance
Lenders must consider public assistance income (Social Security, disability, welfare, child support, alimony) on the same basis as other income. They cannot discount or refuse to consider income because of its source.
Record Retention
Lenders must retain records of credit applications for 25 months after taking action on the application. For HMDA reporters, retention is extended to match HMDA requirements.
Government Monitoring Data
For home purchase loans, lenders must collect and report applicant demographic data (race, ethnicity, sex) for fair lending monitoring purposes. The applicant may decline to provide this information, but the lender must note the data based on visual observation.
Sample ECOA Exam Questions
Under ECOA, which of the following is a prohibited basis for credit discrimination that is NOT covered by the Fair Housing Act?
A) Disability
B) Familial status
C) Marital status
D) Race
Correct: C — Marital status is protected under ECOA (Regulation B) but NOT under the Fair Housing Act. Conversely, disability and familial status are protected under Fair Housing but not specifically listed under ECOA. This is one of the most commonly tested distinctions on the NMLS exam.
A mortgage applicant is denied a loan. Under ECOA, the lender must provide an adverse action notice within:
A) 10 business days
B) 15 business days
C) 30 days
D) 60 days
Correct: C — ECOA requires lenders to provide an adverse action notice within 30 days of taking adverse action. The notice must include the specific reasons for denial (or the right to request reasons within 60 days) and the applicant's right to receive a free copy of their credit report.
A lender requires both spouses to sign a mortgage application whenever the applicant is married. This practice:
A) Is required by ECOA
B) Violates ECOA — spousal signature cannot be required solely based on marital status
C) Is acceptable if the state is a community property state
D) Is required for all FHA loans
Correct: B — Under ECOA, a lender cannot require a spouse's signature solely because the applicant is married. A spouse's signature is only required when: the spouse is a co-borrower, the spouse's income is needed, or the property pledged as collateral requires the spouse's signature (community property states).