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Thursday, July 7, 2016

ECOA preemption of State Laws

QUESTION
What state laws are inconsistent with ECOA and considered to be preempted?

ANSWER
A state law is deemed to be inconsistent with the Equal Credit Opportunity Act (ECOA) and less protective of the applicant to the extent that the law: 
  1. Requires or permits a practice or act prohibited by ECOA;
  2. Prohibits the individual extension of consumer credit to both parties to a marriage if each spouse individually and voluntarily applied for such credit;
  3. Prohibits inquiries or collection of data required for ECOA compliance;
  4. Prohibits asking about or considering age in an empirically derived, demonstrably and statistically sound, credit-worthiness, or to favor an elderly applicant; or
  5. Prohibits inquiries necessary to establish or administer a special purpose credit program. [12 CFR § 202.11(b)]
Jonathan Foxx 
President & Managing 
Director Lenders Compliance Group