The Equal Credit Opportunity Act: A Functional Failure

34 Pages Posted: 8 Jul 2011

See all articles by John H. Matheson

John H. Matheson

University of Minnesota Law School

Date Written: January 1, 1984


The Equal Credit Opportunity Act was enacted in 1974 as (1) a consumer protection statute designed to provide accurate information to and about consumers involved in credit transactions, and (2) and antidiscrimination statute designed to shield protected classes of consumers from discrimination in the granting of credit. The Federal Reserve Board promulgated regulations to further these statutory goals. Congress intended that the Act would be enforced through both private litigation and public compliance programs. Few private lawsuits have been brought under the Act, however, and public enforcement efforts have neither checked credit discrimination nor halted perpetuation of prior discrimination.

Professor Matheson believes that courts, government enforcement agencies, and consumers should focus on substantive (rather than procedural) violations of the Act and its implementing regulations. The Act should be amended to allow for a minimum damage recovery for successful plaintiffs. The definition of "adverse action" in the regulations should be amended to acknowledge that credit granted on different terms than those requested by an applicant may indicate illegal discrimination. Detailed statistical information must be kept by credit-granting institutions and made available to private litigants and government enforcement agencies to assist them in identifying and eliminating credit discrimination. Professor Matheson believes that these changes will help create a statutory and regulatory framework that will promote better compliance by creditors with the Act's provisions and enhance enforcement efforts by both private parties and public agencies.

Suggested Citation

Matheson, John H., The Equal Credit Opportunity Act: A Functional Failure (January 1, 1984). Harvard Journal on Legislation, Vol. 21, p. 371, 1984, Available at SSRN:

John H. Matheson (Contact Author)

University of Minnesota Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States
612-625-3879 (Phone)

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