The Equal Credit Opportunity Act (15 USC 1691) prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age, or public-assistance income. It applies to both consumer and business credit, and the CFPB's Section 1071 rule extends its data-collection requirements to small-business lending.
ECOA was enacted in 1974 and extended to business credit in 1976. It makes it unlawful for any creditor to discriminate against any applicant on any of the protected bases listed above. Unlike TILA, which is limited to consumer credit, ECOA applies across the board — personal loans, mortgages, credit cards, and business loans are all covered. The CFPB's Dodd-Frank Section 1071 rulemaking (finalized 2023) is the most significant recent ECOA development for small-business lenders. Section 1071 requires covered financial institutions to collect and report data on small-business credit applications — including race, sex, and ethnicity of the business's principal owners — so regulators can identify lending disparities. This builds a HMDA-style data infrastructure for small-business credit. For business owners, ECOA matters in a few practical ways: if a lender denies your application, you have the right to a written adverse action notice explaining the reason. You cannot be denied credit because of your sex or the ethnicity of your business's neighborhood. And lenders cannot impose different terms on similarly-qualified borrowers based on protected characteristics.
Yes. Unlike TILA, which primarily covers consumer credit, ECOA applies to all credit extensions — consumer and business. If a lender discriminates against your business loan application based on protected characteristics (race, sex, national origin, etc.), that's an ECOA violation.
Section 1071 of the Dodd-Frank Act amended ECOA to require small-business lenders to collect and report data on loan applications by race, sex, and ethnicity of principal owners. The CFPB finalized the implementing rule in 2023. It creates a HMDA-equivalent data infrastructure for small-business lending so regulators can spot discriminatory patterns across the market.
If a lender denies your application, makes a counteroffer you don't accept, or takes adverse action on an existing account, ECOA requires written notice within 30 days explaining the specific reasons. For business credit, you must request this notice (it's not always sent automatically for business accounts). For consumer credit, it's automatically required.
The CFPB has primary enforcement authority, with shared jurisdiction by federal banking regulators (OCC, FDIC, Federal Reserve) for the institutions they oversee. The Department of Justice can bring pattern-or-practice discrimination cases. State attorneys general also have enforcement authority.