15 U.S.C. § 1691 et seq.
ECOA: credit discrimination, and the notice a lender owes when it says no
A claim in United States district courts · Last verified August 26, 2026
Two things about the Equal Credit Opportunity Act surprise people who assume it works like the employment discrimination statutes.
It covers business credit, not just consumer credit. A company denied a line of credit on a prohibited basis has a claim.
And there is no agency charge to file. No 180-day clock, no right-to-sue letter — five years, and you may go straight to court.
What the claim is
A creditor discriminated against you in a credit transaction, or failed to tell you why it said no.
The prohibited bases are broader than most civil rights statutes: race, colour, religion, national origin, sex, marital status, age, the fact that your income comes from public assistance, and your good-faith exercise of rights under the consumer credit laws.
Two distinct claims live here:
- Discrimination — denial, worse terms, a higher rate, a required co-signer, or discouragement from applying at all.
- Adverse-action notice failure — the creditor denied or revoked credit and did not send the notice explaining the specific reasons.
The second is easier to prove and is a substantial share of the filings.
Where the right comes from
Express, and the prohibition is broad:
It shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction … on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract) …
A separate section creates the private right of action, and Regulation B supplies the operating detail — including the notice requirements.
What a plaintiff has to prove
- You are an applicant.
- The defendant is a creditor.
- Adverse action or discriminatory treatment in a credit transaction.
- On a prohibited basis.
For an adverse-action notice claim the analysis is simpler: the creditor took adverse action and did not send a compliant notice within the required period. Intent is not in issue.
One live question worth flagging. Whether the statute reaches disparate impact — a neutral policy with a discriminatory effect — has been contested for decades and is currently unsettled at the regulatory level, with the agency's recent position disclaiming impact liability. Treat the disparate-impact route as unstable and verify its status before relying on it. Disparate treatment is not in doubt.
How long you have to file
Five years from the occurrence of the violation.
That is a long window by consumer-statute standards, and it is recent — the period was two years until the 2010 financial reform legislation extended it. Courts have held the extension does not revive claims that had already expired under the old two-year rule.
Where the government brings an enforcement action within the period, an applicant may sue within one year of its commencement.
What has to happen before you file
Nothing. No charge, no exhaustion, no notice to the creditor.
The 30-day adverse-action notice is a duty the creditor owes you, not a step you must take. Character: a substantive element of the notice claim — the failure to send it is the violation, so there is nothing to exhaust and nothing to cure.
Who can be sued — and who cannot
Creditors, defined broadly enough to include assignees who participated in the credit decision.
Both consumer and business credit are covered, which is unusual among the consumer-finance statutes and is the most commonly missed feature of the Act.
No general individual-employee liability.
One area to check before pleading: whether a spousal guarantor counts as an "applicant" with standing to sue, and whether the Act can be used defensively by way of recoupment, are unsettled in places.
Common defenses
A legitimate, non-discriminatory reason for the decision — creditworthiness, income, collateral.
The plaintiff is not an "applicant" — the standing attack, common in guarantor cases.
The five-year bar.
Recoupment limits, where the claim is raised defensively against a collection action.
What the claim pays
Actual damages, including out-of-pocket loss and, in many courts, emotional distress.
Punitive damages capped at $10,000 in an individual action — a real cap, and low. Class punitive damages are capped at the lesser of $500,000 or 1% of the creditor's net worth.
Reasonable attorney's fees and costs to a successful applicant. That fee provision is what makes small notice-violation cases viable.
What people get wrong
"It only covers consumer credit." No. Business credit is covered too.
"The deadline is two years." Not since 2010 — it is five. Older sources are unreliable here.
"I have to file with an agency first." You do not.
"I need to prove they meant to discriminate." For a notice-failure claim, no. The missing notice is the violation.
"Punitive damages are uncapped." They are capped at $10,000 individually.
"Being told 'you didn't qualify' satisfies the notice requirement." Generally not. The notice must give the specific reasons, or tell you how to request them.
Where it came from
The Act passed in 1974, and as enacted it prohibited discrimination only on the basis of sex and marital status — aimed at a practice that was then routine: creditors requiring a husband's signature on a wife's application, or refusing to count a married woman's income at all.
The 1976 amendments added race, colour, religion, national origin, age, and public-assistance income, turning a narrow fix into a general credit-discrimination statute.
The 2010 financial reform legislation moved rulemaking to the Consumer Financial Protection Bureau and extended the limitations period from two years to five.
The live question is regulatory rather than judicial: recent amendments to the implementing regulation addressing disparate impact are a significant and likely-litigated development. Anything you read about impact liability under this statute should be checked against its date.
Common questions
How long do I have to sue for credit discrimination?
Five years from the violation. The period was two years before the 2010 financial reform legislation extended it, and courts have held the extension does not revive already-expired claims.
Do I have to file a complaint with an agency first?
No. There is no charge-filing or exhaustion requirement — you may sue directly.
Does the Act cover business loans?
Yes. Unlike most consumer-finance statutes, it reaches business credit as well as consumer credit.
What is an adverse-action notice?
Written notice that the creditor denied, revoked, or unfavourably changed your credit, stating the specific reasons or telling you how to obtain them. Failing to send it is itself a violation you can sue over, without proving any discriminatory motive.
How much can I recover?
Actual damages, punitive damages capped at $10,000 in an individual case, and reasonable attorney's fees and costs. Class punitive damages are capped at the lesser of $500,000 or 1% of the creditor's net worth.