Whether the Equal Credit Opportunity Act Creates Disparate-Impact Liability

Summary

This memorandum opinion for the General Counsel of the Federal Trade Commission concludes that the Equal Credit Opportunity Act does not create disparate-impact liability. It interprets the statute as prohibiting intentional discrimination because ECOA focuses on an actor’s intent and lacks results-oriented language comparable to provisions in Title VII, the ADEA, and the Fair Housing Act. The opinion also discusses relevant Supreme Court precedent, agency interpretations, legislative history, and the effect of Loper Bright Enterprises v. Raimondo.

Holdings

1. The Equal Credit Opportunity Act does not create liability for unintended disparate impacts; it prohibits only intentional discrimination.
2. ECOA's exemptions, amendments, legislative history, and broad statutory purpose do not overcome the statute's text and do not support disparate-impact liability.
3. Evidence of disparate impact may be relevant as evidence suggesting intentional discrimination, but disparate impact alone is insufficient to establish ECOA liability.

Questions Presented

1. Whether the Equal Credit Opportunity Act creates liability for disparate impacts caused by facially neutral credit practices.
2. Whether ECOA's text, structure, statutory history, legislative history, and statutory purpose support extending liability beyond intentional discrimination.
3. Whether prior agency interpretations and legislative history can establish disparate-impact liability despite ECOA's lack of results-oriented statutory language.

Disposition

other