In 1970, the Fair Credit Reporting Act (FCRA) was passed by Congress. This did not target racial discrimination, but it was a start in promoting accuracy, fairness, and the privacy of personal information assembled by Credit Reporting Agencies (CRAs). The CRAs — also known as “credit bureaus” — compile credit reports on individuals for businesses. However, CRAs were criticized for providing inaccurate or incomplete reports, which led to the denial of services and opportunities. They also utilized “lifestyle” factors that led to further discrimination on reports.
In 1974, Congress passed the Equal Credit Opportunity Act (ECOA). The ECOA prohibited discrimination based on sex and marital status, as its initial purpose was to address lending discrimination against women. In 1976, it was amended to include race, color, religion, national origin, age, receipt of public assistance, and the exercise of one’s rights under certain consumer protection laws.
In 1975, the Home Mortgage Disclosure Act (HMDA) was passed by Congress to address the deleterious effects of redlining. Urban decay was on the rise in predominantly Black neighborhoods due to urban flight and additional barriers to rehabilitating portions of the cities that had deteriorated over decades of disinvestment. The HMDA created public disclosure requirements and protocols to better assist both the public and public officials in determining whether financial institutions and public investments were accurately targeting and serving the appropriate areas of need for the relevant communities. The HDMA was amended in 1989 to enhance enforcement of laws prohibiting lending discrimination by requiring collection and disclosure of data about applicant and borrower characteristics. The resulting transparency in the lending and public investment processes — coupled with the teeth of funding enforcement measures — was paramount to addressing some of the worst effects of historical, discriminatory redlining.