TAILIEUCHUNG - Equal Credit Opportunity: Understanding Your Rights Under the Law

While the effects of relaxing exclusivity warrant further research, in general it would not eliminate our main points regarding nonsophisticated borrowers. Even if borrowers had access to a competitive market in period 1, our results remain unchanged so long as the original firm can include in the contract a fee—such as the prepayment penalties in subprime mortgages—for refinancing with any firm in the market. If firms cannot postulate such a fee for refinancing on the competitive market, then in our three-period setting a borrower will always avoid repaying more than expected. But as predicted by O’Donoghue and Rabin (2001) and is consistent with evidence in. | FTC Facts Credit Eằí For Consumers May 2009 Federal Trade Commission For The Consumer 1-877-ftc-help Equal Credit Opportunity Understanding Your Rights Under the Law People use credit to pay for education or a house a remodeling job or a car or to finance a loan to keep their business operating. The Federal Trade Commission FTC the nation s consumer protection agency enforces the Equal Credit Opportunity Act ECOA which prohibits credit discrimination on the basis of companies and credit unions. Everyone who participates in the decision to grant credit or in setting the terms of that credit including real estate brokers who arrange financing must comply with the EcOa. Here s a brief summary of the basic provisions of the ECOA. race color religion national origin sex marital status age or because you get public assistance. Creditors may ask you for most of this information in certain situations but they may not use it when deciding whether to give you credit or when setting the terms of your credit. Not everyone who applies for credit gets it or gets the same terms Factors like income expenses debts and credit history are among the considerations lenders use to determine your creditworthiness. The law provides protections when you deal with any organizations or people who regularly extend credit including banks small loan and finance companies retail and department stores credit card I. When You Apply For Credit Creditors May Not. Discourage you from applying or reject your application because of your race color religion national origin sex marital status age or because you receive public assistance. Consider your race sex or national origin although you may be asked to disclose this information if you want to. It helps federal agencies enforce anti-discrimination laws. A creditor may consider your immigration status and whether you have the right to stay in the country long enough to repay the debt. FTC Facts For Consumers 2 Impose different terms or .