ECOA Preemption of State Laws

Question: What state laws are inconsistent with ECOA and considered to be preempted?

Answer
A state law is deemed to be inconsistent with the Equal Credit Opportunity Act (ECOA) and less protective of the applicant to the extent that the law: 

►Requires or permits a practice or act prohibited by ECOA;
►Prohibits the individual extension of consumer credit to both parties to a marriage if each spouse individually and voluntarily applied for such credit;
►Prohibits inquiries or collection of data required for ECOA compliance;
►Prohibits asking about or considering age in an empirically derived, demonstrably and statistically sound, credit-worthiness, or to favor an elderly applicant; or
►Prohibits inquiries necessary to establish or administer a special purpose credit program. [12 CFR § 202.11(b)]

Jonathan Foxx is president and managing director of Lenders Compliance Group, Brokers Compliance Group, Servicers Compliance Group and Vendors Compliance Group, national companies devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted by phone at (516) 442-3456, by e-mail at [email protected] or visit LendersComplianceGroup.com.