Equal credit opportunity act of 197412/27/2023 As Gail Collins remembers in her book When Everything Changed, "Men, in their capacity as breadwinners, were presumed to be the money managers on the home front as well as in business, and women were cut out of almost everything having to do with finances." The Equal Credit Opportunity Act made it unlawful for issuers to discriminate on the basis of sex, marital status, race, religion or other factors one result was that women could rely on the income of their spouses to take out cards in their own names. Divorced women were believed to be bad with money because they couldn't keep a marriage under control. Women's exclusion from loans and credit products was mostly based on pervasive social bias, such as the idea that women were likely to stop working to become pregnant if they were under 28, making their salaries undependable. As Elizabeth Warren puts it, "The financial industry has perfected the art of offering mortgages, credit cards, and check-overdrafts laden with hidden terms that obscure price and risk."īefore the 1970s, credit was only given to those who the white men in charge wanted to do business with, excluding women, minorities and low-income families. They offered low teaser interest rates that ballooned to double or triple later on. They hid terms and fees at the back of agreements, which have bloated up to thirty pages from a page and a half in the early 1980s. As usury laws were relaxed in court decision after court decision during the late 1970s and early 1980s, the credit card industry figured out how to keep consumers indebted. These regulations are in response to bank practices that have left Americans trapped in products they don't understand and can't pay their way out of. While it won't be fully functional until it has a permanent chief, once it's up and running it will start issuing new rules and ramping up enforcement of existing ones. The Dodd-Frank financial reform bill of 2010 created the Consumer Financial Protection Bureau, whose mission is to restrict predatory practices and make products safer and more transparent. The bill includes protections against interest rate increases without reason or notification and bans hikes in the first year of an account, gives consumers more time to pay their bills, forces companies to apply excess payments to the highest interest balance first and puts statements into understandable language, among other things. The most recent push toward industry regulation is the Credit Card Accountability, Responsibility and Disclosure Act (CARD Act), which Obama signed into law in May 2009. As those regulations are put in place, will women see some of their financial power eroded? But some critics of increased regulation contend that deregulation allowed companies to lend to borrowers who would have faced discrimination early in the industry's life, including women, low-income people and people of color. The industry is in desperate need of reform and regulation, and the Obama administration has already begun to rein in lenders. Of course, female borrowers aren't the only ones feeling credit card company abuses interest rates have soared, fees have stacked up and terms and conditions have become obscured at the back of lengthy contracts across the board. As a group, women are financially less stable than men are that made them a prime target for companies looking to profit from late fees and interest on unpaid balances. Women who obtained credit found themselves bearing a disproportionate share of lender abuses. But as the market opened up to female borrowers, lenders began lobbying to relax usury laws and developing predatory practices.
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