What act was enacted in 1974 to ensure equal credit availability?

The Equal Credit Opportunity Act (ECOA) was enacted in 1974 to promote fairness in credit lending by prohibiting discrimination on the basis of race, color, national origin, sex, marital status, age, or because an applicant receives public assistance. This pivotal legislation was designed to ensure that all consumers have equal access to credit and to enhance economic opportunities for individuals who may have been overlooked or disadvantaged in the traditional lending process.

The ECOA requires lenders to provide equal treatment in the credit application process, ensuring that credit decisions are based solely on a borrower's creditworthiness rather than on discriminatory factors. This law has significant implications, as it promotes diversity and inclusivity in finance, ensuring that a broader segment of the population can obtain credit.

Understanding the ECOA is crucial for professionals in the payments and finance sectors as it guides compliance with fair lending practices and helps foster an equitable environment in credit availability. For these reasons, the ECOA is correctly identified as the act that was enacted in 1974 to ensure equal credit availability.