This Indeed Hampers The Credit Scores Considerably

Category: Finance, Credit.

Equal and unequal consumer credit opportunities: Consumer credit and its necessity: Every individual requires credit for better lifestyle, starting a business, purchasing a house, re modeling an existing home etc. as all these depends upon credit. But the whole thing depends upon existing debt, income, credit history, creditworthiness, expenses etc.

The Equal Credit Opportunity Act facilitates consumers to enjoy equal opportunities for obtaining credit. While dealing with varied creditors like credit card companies, retail and departmental, credit unions stores, financial institutions like banks and small loan companies, it has been revealed many times equal opportunity gets distorted. Disparity: As it is The FRB Boston study highlighted the disparity among the mortgage lenders in dispatching loans to the consumers. The law protects every consumer to deal with the creditors whenever any malpractice crops up. This is utter violation to the law. Discrimination within the whites and the minorities popped up in transactions of mortgage lenders are now considered suspect under Fair Lending Laws. Again many instances are found where the consumers receive unequal treatment.

Banking regulators are investigating their behavior. This indeed hampers the credit scores considerably. Data, highlighting unlawful disparity will exert tremendous pressure upon Federal Banking regulators and US Department of Housing and Loan. As equal consumer opportunity distorted. The minorities even with fair enough credit score were refused to obtain credit- this further lead to unfriendly relationship among the neighbors. In the recent past, Chicago witnessed a strong correlation between minorities and mortgage discrimination. Census tracked during 1990 proves more than 50% disapprovals comprised the minorities.

Statutory Laws are prominent over the years but hardly steps were taken to suppress disparity in behavior of the lenders. Title VIII of the Civil Rights Act of 1968 and the Equal Credit Opportunity Act of 1976, prohibit discrimination against, being combined mortgage applicants. Though, it may be said that lack of publicity of these data was the major cause for lack of actions. Mortgage lending rate is comparatively lower in case of African and Latin neighborhoods compared to white neighborhoods. Moreover, loans by credit organizations may affect credit score. Residents of minor neighborhoods do not enjoy equal opportunity like those of white neighborhoods.

Whenever a consumer proves in a court any discrimination from the agency s end, the court fees are totally reimbursed and compensated. The Equal Credit Opportunity Act ensures a person if discriminated can check it with The Sate Attorney General. Joining with other class action suite provides punitive damages for the group up to$ 500, 00People should come forward with more awareness about legal procedures and against undue discrimination. This leads to further trouble and confusion regarding future financial conditions. Rejection by several credit organizations results in poor credit report. Re- scoring is truly difficult and involves risk. Federal law attempts to prevent discrimination on Consumer Finance for better practice of equal consumer credit opportunity.

Who is the final Judge? US Civil Rights are highly in practice and properly protected, residents should play a proactive part in preservation of the rights. Unbiased contribution from the Fourth Estate was praiseworthy. After the Los Angeles riots, several press highlighted discrimination and the true scene. Still the victims have to carry out the final countdown to supplement inequality in consumer credit.

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