Access Matters: Celebrating the Equal Credit Opportunity Act

It seems unbelievable now, but did you know that lenders used to require women to sign “baby letters” – affidavits stating that they wouldn’t have any children while paying off their loan? Or that lenders regularly discounted a woman’s income by 50% or more when she applied for credit, simply because she was a woman? 

Stories like these abound until 1974, when the Equal Credit Opportunity Act was passed.

As we near the half-century mark since the landmark civil rights legislation was passed, following the events of 2020, we spoke with Capital One leaders Emilia Lopez, Senior Vice President of US Card, and Mili Mittal, Vice President of Creditwise, about the significance of the law and why access to credit is so important.

What is the Equal Credit Opportunity Act?

The Equal Credit Opportunity Act (ECOA) is federal civil rights law that prevents lenders from discriminating against credit applicants based on factors unrelated to their ability to repay. Specifically, ECOA protects consumers from lending discrimination based on race, color, religion, national origin, sex, marital status, age, public assistance, or the exercise of any rights under the Consumer Credit Protection Act.

The Purpose of the Equal Credit Opportunity Act of 1974

Equal access to credit in the ‘70s was especially important to Lindy Boggs. After her husband, a Representative in the U.S. House of Representatives, disappeared in a bush plane accident in Alaska while on a campaign trip, she found it difficult to access the credit she needed to take care of her family. 

So, as a newly-elected Representative filling her husband’s shoes, she took a risk: A new bill came across her desk, the Equal Credit Opportunity Act, designed to prohibit certain types of lending discrimination. She noted that the bill didn’t cover women and married people. So, Rep. Boggs simply added the words “or sex or marital status” to the bill, photocopied it, and distributed those copies to her other committee members without even consulting them. “I’m sure it was just an oversight that we didn’t have ‘sex’ or ‘marital status’ included,” she said. “I’ve taken care of that, and I trust it meets with the committee’s approval.”

It did. That bill was then passed unanimously by the committee, and it eventually became the law we have today. 

That was nearly 50 years ago, but Mittal and Lopez agree that the guiding vision of creating equal financial access remains vital.

“Given the national conversation of 2020 around the urgency to bring equity and opportunity to all – especially financially – you can see just how important this law remains today,” Mittal said.

Equal Credit Opportunity Act Benefits for Individuals and Communities

"For me, the Equal Opportunity Act is incredibly important because it helps with two things,” says Lopez. “One, leveling the playing field, both at the consumer level and at the industry level. And two, acknowledging the importance of having access to credit to help shape the financial path and financial journey of individuals."

One individual or even one corporation can only impact so much in the grand scheme of things. But by changing the rules for how things work, the ECOA forces everyone to be more equitable. And that’s what really matters when changing communities. 

Since the passage of the Equal Credit Opportunity Act in 1974, lenders can no longer discriminate against you on the basis of your sex or gender, marital status, race, religion, national origin, age, whether you’re receiving public assistance, or whether you’re exercising your rights under laws designed to protect consumers. 

"Whether you know it or not, it's probably impacted you in some way, shape, or form, or a family member or a friend," says Mittal. 

Continuing to Push for Equal Access to Credit

At the same time, Capital One recognizes that a lack of discrimination and the actual opportunity available for someone aren’t always the same thing. 

“Not everybody has the privilege of having the opportunity to observe through their parents, their mentors, or people in their community what it means to handle credit responsibly, and how doing that can actually unlock opportunities for you,” says Lopez. 

To that end, Capital One is committed to leveling the playing field in other ways. People can use Capital One’s free tool CreditWise to learn more about their credit score, for example, or explore free one-on-one money coaching at a Capital One Café to consider how they can think about their relationship with money so that they can improve it.

“A credit score is a little number that defines so many aspects of one's life. Building that little number can help open up so much opportunity,” says Lopez. 

Mittal agrees,“Expanding access to credit gives more Americans the opportunity to afford higher education, build businesses, achieve the dream of homeownership, and ultimately create strong, vibrant communities.”

Equal Opportunity Beyond Credit

One of the biggest ways we’ve  pushed for equality at Capital One is by creating a workforce – including in leadership positions – that accurately reflects the wide range of customers we serve. 

“We have always, as a culture, believed in the principle of truth-seeking,” says Lopez. “It's essentially not trying to be right, but trying to get to the best possible answer. And we believe that one element that helps in getting there is consulting different opinions.”

That’s why conversations about topics like the Equal Credit Opportunity Act are so important at Capital One. “The ECOA underscores our purpose as an organization, because from our earliest days, we’ve worked to make a meaningful difference in the lives of the people we touch. The company was founded on the principle that great talent, great analytics and great technology could democratize credit and revolutionize financial services,” Mittal said.