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H.R. 6516 (94th): Equal Credit Opportunity Act Amendments


The text of the bill below is as of Mar 23, 1976 (Passed Congress).


PUBLIC LAW 94-239—MAR. 23, 1976                                     90 STAT. 251

Public Law 94-239
94th Congress
                                  An Act
To amend title VII of the (Consumer Credit Protection Act to include discrimina-    Mar. 23, 1976
  tion on the basis of race, color, religion, national origin, and age, and for      [H.R. 6516]
  other purposes.

   Be it enacted hy the Senate and House of Representatives of the
United States of America in Congress assenibled^ That (a) this Act                 Equal Credit
may be cited as the "Equal Credit Opportunity Act Amendments of                    Opportunity Act
1976".                                                                             Amendments of
   (b) Title V I I of the Consumer Credit Protection Act is amended                1976.
                                                                                   15 u s e 1691
by adding at the end thereof the following new section:                            note.
Ǥ 709. Short title
   "This title may be cited as the 'Equal Credit Opportunity Act'."                Equal Credit
   (c) Section 501 of Public Law 93-4:95 is repealed.                              Opportunity Act.
   SEC. 2. Section 701 of the Equal Credit Opportunity Act is amended              15 use 1691
to read as follows:                                                                note.
                                                                                   Repeal.
"§ 701. Prohibited discrimination; reasons for adverse action                      15 use 1691
   "(a) It shall be unlawful for any creditor to discriminate against              note.
any applicant, with respect to any aspect of a credit transaction—                 15 use 1691.
        "(1) on the basis of race, color, religion, national origin, sex
     or marital status, or age (provided the applicant has the capacity
     to contract) ;
        "(2) because all or part of the applicant's income derives from
     any public assistance program; or
        "(3) because the applicant has in good faith exercised any
     right under the Consumer Credit Protection Act.                               15 use 1601
   "(b) It shall not constitute discrimination for purposes of this title          note.
for a creditor—
        "(1) to make an inquiry of marital status if such inquiry is for
     the purpose of ascertaining the creditor's rights and remedies
     applicable to the particular extension of credit and not to dis-
     criminate in a determination of credit-worthiness;
        "(2) to make an inquiry of the applicant's age or of whether
     the applicant's income derives from any public assistance pro-
     gram if such inquiry is for the purpose of determining the
     amount and probable continuance of income levels, credit history,
     or other pertinent element of credit-worthiness as provided in
     regulations of the Board;
       "(3) to use any empirically derived credit system which con-
     siders age if such system is demonstrably and statistically sound
     in accordance with regulations of the Board, except that in the
     operation of such system the age of an elderly applicant may not
     be assigned a negative factor or value; or
       "(4) to make an inquiry or to consider the age of an elderly
     applicant when the age of such applicant is to be used by the
     creditor in the extension of credit in favor of such applicant.
   "(c) It is not a violation of this section for a creditor to refuse to
extend credit offered pursuant to—
       " (1) any credit assistance program expressly authorized by law
     for an economically disadvantaged class of persons;

90 STAT. 252 PUBLIC LAW 94-239—MAR. 23, 1976 " (2) any credit assistance program administered by a nonprofit organization for its members or an economically disadvantaged class of persons; or " ( 3 ) any special purpose credit program offered by a profit- m a k i n g organization to meet special social needs which meets standards prescribed in regulations by the B o a r d ; if such refusal is required by or made pursuant to such program. Notice. " ( d ) ( 1 ) W i t h i n t h i r t y days (or such longei reasonable time as specified in regulations of the Board for any class of credit trans- action) after receipt of a completed application for credit, a creditor shall notify the applicant of its action on the application. Statement of " ( 2 ) E a c h applicant against whom adverse action is taken shall be reasons. entitled to a statement of reasons for such action from the creditor. A creditor satisfies this obligation by— " ( A ) providing statements of reasons in writing as a matter of course to applicants against whom adverse action is t a k e n ; or " ( B ) giving written notification of adverse action which dis- closes (i) the applicant's r i g h t to a statement of reasons within t h i r t y days after receipt by the creditor of a request made within sixty days after such notification, and (ii) the identity of the person or office from which such statement may be obtained. Such statement may be given orally if the written notification advises the applicant of his right to have the statement of reasons con- firmed in writing on written request. " ( 3 ) A statement of reasons meets the requirements of this section only if it contains the specific reasons for the adverse action taken. " (4) Where a creditor has been requested by a t h i r d p a r t y to make a specific extension of credit directly or indirectly to an applicant, the notification and statement of reasons required by this subsection may be made directly by such creditor, or indirectly through the t h i r d p a r t y , provided in either case that the identity of the creditor is disclosed. " ( 5 ) The requirements of p a r a g r a p h ( 2 ) , ( 3 ) , or (4) may be satis- fied by verbal statements or notifications in the case of any creditor who did not act on more t h a n one hundred and fifty applications d u r i n g the calendar year preceding the calendar year in which the adverse action is taken, as determined under regulations of the Board. "Adverse " ( 6 ) F o r purposes of this subsection, the term 'adverse action' action." means a denial or revocation of credit, a change in the terms of an existing credit arrangement, or a refusal to g r a n t credit in substan- tially the amount or on substantially the terms requested. Such term does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is delinquent or otherwise in default, or where such additional credit would exceed a previously established credit limit.". 15 use 1691b. SEC. 3. (a) Section 703 of t h e E q u a l Credit Opportunity Act is amended— (1) by inserting " ( a ) " immediately before " T h e B o a r d " ; (2) by inserting after the second sentence thereof the following new sentence: " I n particular, such regulations may exempt from one or more of the provisions of this title any class of transactions not primarily for personal, family, or household purposes, if the Board makes an express finding that the application of such pro- vision or provisions would not contribute substantially to carry- ing out the purposes of this title."; and (3) by adding at the end thereof the following new subsection: Consumer " ( b ) The Board shall establish a Consumer Advisory Council to Advisory Council. advise and consult with it in the exercise of its functions under the Establishment.
PUBLIC LAW 94-239—MAR. 23, 1976 90 STAT. 253 Consumer Credit Protection Act and to advise and consult with it 15 use 1601 concerning other consumer related matters it may place before the note. Council. I n appointing the members of the Council, the Board shall seek to achieve a fair representation of the interests of creditors and consumers. The Council shall meet from time to time at the call of the Board. Members of the Council who are not regular full-time employ- ees of the United States shall, while attending meetings of such Coun- cil, be entitled to receive compensation at a rate fixed by the Board, but not exceeding $100 per day, including travel time. Such members may be allowed travel expenses, including transportation and sub- sistence, while away from their homes or regular place of business.". (b) (1) Section 110 of the T r u t h in Lending Act is repealed. Repeal. (2) T h e table of sections of chapter 1 of such Act is amended by 15 u s e 1609. striking out item 110. 15 u s e 1601 et seq. SEC. 4. Section 704(c) of the Equal Credit O p p o r t u n i t y Act is 15 u s e 1691c. amended by inserting before the period at the end thereof the follow- i n g : ", including the power to enforce any Federal Reserve Board regulation promulgated under this title in the same manner as if the violation had been a violation of a Federal T r a d e Commission trade regulation rule". SEC. 5. Section 705 of the Equal Credit Opportunity Act is 15 u s e 1691d. amended— (1) by amending subsection (e) to read as follows: " ( e ) Where the same act or omission constitutes a violation of this title and of applicable State law, a person aggrieved by such conduct may b r i n g a legal action to recover monetary damages either under this title or under such State law, but not both. This election of remedies shall not apply to court actions in which the relief sought does not include monetary damages or to administrative actions."; and (2) by adding the following new subsections: " ( f ) This title does not annul, alter, or affect, or exempt any person subject to the provisions of this title from complying with, the laws of any State with respect to credit discrimination, except to the extent that those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. The Board is authorized to determine whether such inconsistencies exist. The Board may not determine that any State law is inconsistent with any provision of this title if the Board determines t h a t such law gives greater protection to the applicant. " ( g ) The Board shall by regulation exempt from the requirements of sections 701 and 702 of this title any class of credit transactions 15 u s e 1691, within any State if it determines that under the law of t h a t State 1691a. tliat class of transactions is subject to requirements substantially simi- lar to those imposed under this title or that such law gives greater protection to the applicant, and that there is adequate provision for enforcement. Failure to comply with any requirement of such State law in any transaction so exempted shall constitute a violation of this title for the purposes of section 706.". Infra. SEC. 6. Section 706 of the E q u a l Credit O p p o r t u n i t y Act is amended 15 u s e 1691e. to read as follows: «§ 706. Civil liability " ( a ) A n y creditor who fails to comply with any requirement imposed under this title shall be liable to the aggrieved applicant for any actual damages sustained by such applicant acting either in an individual capacity or as a member of a class. " ( b ) A n y creditor, other than a government or governmental sub-
90 STAT. 254 PUBLIC LAW 94-239—MAR. 23, 1976 division or agency, who fails to comply with any requirement imposed under this title shall be liable to the aggrieved applicant for punitive damages in an amount not greater than $10,000, in addition to any actual damages provided in subsection (a), except that in the case of a class action the total recovery under this subsection shall not exceed the lesser of $500,000 or 1 per centum of the net worth of the creditor. In determining the amount of such damages in any action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of com- pliance by the creditor, the resources of the creditor, the number of persons adversely aflfected, and the extent to which the creditor's fail- ure of compliance was intentional. "(c) Upon application by an aggrieved applicant, the appropriate United States district court or any other court of competent jurisdic- tion may grant such equitable and declaratory relief as is necessary to enforce the requirements imposed under this title. "(d) In the case of any successful action under subsection (a), (b), or (c), the costs of the action, together with a reasonable attorney's fee as determined by the court, shall be added to any damages awarded by the court under such subsection. "(e) No provision of this title imposing liability shall apply to any act done or omitted in good faith in conformity with any official rule, regulation, or interpretation thereof by the Board or in conformity with any interpretation or approval by an official or employee of the Federal Reserve System duly authorized by the Board to issue such interpretations or approvals under such procedures as the Board may prescribe therefor, notwithstanding that after such act or omission has occurred, such rule, regulation, interpretation, or approval is amended, rescinded, or determined by judicial or other authority to be invalid for any reason. "(f) Any action under this section may be brought in the appropri- ate United States district court without regard to the amount in con- troversy, or in any other court of competent jurisdiction. No such action shall be brought later than two years from the date of the occurrence of the violation, except that— "(1) whenever any agency having responsibility for adminis- 15 use 1691c. trative enforcement under section 704 commences an enforcement proceeding within two years from the date of the occurrence of the violation, "(2) whenever the Attorney General commences a civil action under this section within two years from the date of the occur- rence of the violation, then any applicant who has been a victim of the discrimination which is the subject of such proceeding or civil action may bring an action under this section not later than one year after the commencement of that proceeding or action. "(g) The agencies having responsibility for administrative enforce- ment under section 704, if unable to obtain compliance with sec- 15 use 1691. tion 701, are authorized to refer the matter to the Attorney General with a recommendation that an appropriate civil action be instituted. "(h) When a matter is referred to the Attorney General pursuant to subsection (g), or whenever he has reason to believe that one or more creditors are engaged in a pattern or practice in violation of this title, the Attorney General may bring a civil action in any appropriate United States district court for such relief as may be appropriate, including injunctive relief. "(i) No person aggrieved by a violation of this title and by a 42 use 3605. violation of section 805 of the Civil Rights Act of 1968 shall recover
PUBLIC LAW 94-239—MAR. 23, 1976 90 STAT. 255 under this title and section 812 of the Civil Rights Act of 1968, if 42 use 3612. such violation is based on the same transaction. "(j) Nothing in this title shall be construed to prohibit the dis- covery of a creditor's credit granting standards under appropriate discovery procedures in the court or agency in which an action or proceeding is brought,". SEC. 7. The Equal Credit Opportunity Act is amended by redesig- nating section 707 as section 708 and by inserting immediately after 15 use 1691 section 706 the following new section: note. 15 u s e 1691e. "§ 707. Annual reports to Congress 15 u s e 1691f. "Not later than February 1 of each year after 1976, the Board and the Attorney General shall, respectively, make reports to the Con- gress concerning the administration of their functions under this title, including such recommendations as the Board and the Attorney General, respectively, deem necessary or appropriate. In addition, each report of the Board shall include its assessment of the extent to which compliance with the requirements of this title is being achieved, and a summary of the enforcement actions taken by each of the agencies assigned administrative enforcement responsibilities under section 704.". SEC. 8. Section 708 of the Equal Credit Opportunity Act is amended Effective dates. by adding at the end thereof the following new sentence: "The amend- 15 u s e 1691 ments made by the Equal Credit Opportunity Act Amendments of note. 1976 shall take effect on the date of enactment thereof and shall apply to any violation occurring on or after such date, except that the amend- ments made to section 701 of the Equal Credit Opportunity Act shall Ante, p. 251. take effect 12 months after the date of enactment.". 15 u s e 1691. SEC. 9. The table of sections of the Equal Credit Opportunity Act is amended by striking out "707. Effective date." and inserting in lieu thereof the following new items: "707. Annual reports to Congress. "708. Effective date. "709. Short title.". Approved March 23, 1976. LEGISLATIVE HISTORY: HOUSE REPORTS: No. 94-210 (eomm. on Banking, eurrency and Housing) and No. 94-873 (eomm. of eonference). SENATE REPORT No. 94-589 (eomm. on Banking, Housing and Urban Affairs). eONGRESSIONAL REeORD: VoL 121 (1975): June 3, considered and passed House. VoL 122 (1976): Feb. 2, considered and passed Senate, amended. Mar. 9, Senate and House agreed to conference report. WEEKLY eOMPILATION OF PRESIDENTIAL DOeUMENTS: Vol. 12, No. 13 (1976): Mar. 23, Presidential statement. 89-194 O—78—pt. 1 20
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