Banks and other institutions have laws with which they must comply. While most Minnesota banking entities do comply with these laws, the clients or customers may not always see it that way. In fact, it may be necessary for a bank to defend against accusations of violating the Equal Credit Opportunity Act if a disgruntled customer believes that discrimination has occurred.
This act works in efforts to prevent banks and other financial institutions from unjustly discriminating against individuals hoping to take out a loan or apply other forms of credit. A few examples of actions that creditors may not take during the application process include the following:
- Asking whether a person is single, married, widowed or divorced
- Rejecting an application based on a person’s race, gender, religion, ethnicity or other protected characteristics
- Placing harsher stipulations on the loan, such as higher interest rates, due to a person’s protected characteristic
- Asking whether an applicant plans to have children
- Of course, certain allowable questions may relate to some of these areas, such as asking about a person’s expenses that apply to dependents. They may also ask whether a spouse will also be included on the line of credit or whether user access should be granted to a spouse. Unfortunately, some applicants may take these questions as discriminatory, and if a loan or line of credit is denied, they could believe legal action is needed.
If a Minnesota financial institution faces claims of discrimination or other violations of the Equal Credit Opportunity Act, it is important that they address the matter head on. In some cases, this could mean going to court to defend against such allegations. If so, having legal assistance throughout is vital.