|The United States Department of
Justice has reached a settlement with Compass Bank in a lawsuit
alleging that the bank illegally discriminated against unmarried
In a complaint
filed in federal court, the Justice Department alleged the
Birmingham-based bank had violated the Equal Credit Opportunity
Act (ECOA) by charging car loan co-applicants who were not
married to one another higher rates than married couples.
"Under the law,
marital status should have no effect on an individual's access
to credit," said Wan J. Kim, assistant attorney general for the
Justice Department's Civil Rights Division, in a news release.
"We will continue to vigorously enforce the federal laws that
prevent discrimination in credit and lending services."
settlement, which must be approved by a federal judge, requires the
to $1.75 million to non-married car loan customers who were
charged higher interest rates than married couples.
Compass also will promise not to discriminate on the basis of
marital status in any aspect of its automobile lending.
is owned by Compass
Bancshares, Inc. -- a $33.6 billion Southwestern financial
holding company which operates 409 full-service banking offices
in Alabama, Arizona, Colorado, Florida, New Mexico and Texas.
Compass is among the top 30 U.S. bank holding companies by asset
The ECOA is the only area of
federal law which prohibits marital status discrimination by
private businesses. Federal employment laws and fair
housing laws do not include the term "marital status" among the
forms of discrimination which are illegal.
Congress added "marital status"
to the equal credit law in the 1970s in response to pressure
from women's rights organizations complaining that unmarried
women, especially those who were divorced, were being denied
credit because they were not married. In the 1980s, a
federal appeals court clarified that the term "marital status"
was not limited to individuals but also protected unmarried
couples from being treated differently than married couples.
While most states do not prohibit
marital status discrimination in employment and housing, a
27 in all -- do outlaw such discrimination by lenders.
In these states, single people have the option to sue violators
in state court rather than having to file a complaint with a
federal agency, thus giving them added legal protection.
Department launched its investigation into Compass' auto lending
practices after the Federal Reserve Board found "reason to
believe that Compass Bank's loan pricing procedures and
directives constituted a pattern or practice of discrimination."
Reserve Board regulates banks which may violate ECOA while the
Federal Trade Commission
(FTC) has jurisdiction over other lending institutions which may
violate this law.
It is surprising that a
financial institution as large as Compass Bank would engage in
such discrimination, considering the fact that the FTC flexed
its muscle a few years ago and made two national lenders pay
hefty damages because of discriminatory practices against
Ford Credit, the financing
subsidiary of Ford Motor Co., agreed to pay $650,000 in 1999 to
settle allegations it treated unmarried joint applicants for
auto loans differently from married couples.
The FTC said Ford Credit had violated a
U.S. fair lending law during the period between May 1994 and
August 1995 by failing to combine the incomes of unmarried joint
auto loan applicants, as it did with married applicants.
As a result, many unmarried joint applicants were offered credit
on less favorable terms than their married counterparts.
Franklin Acceptance Corporation,
a Philadelphia-based finance company, paid a $800,000 civil
penalty in 1999 for similar alleged violations against unmarried
Those settlements were then among the
largest ever obtained by the FTC under the Equal Credit
Opportunity Act, which bars discrimination against credit
applicants on the basis of race, color, religion, national
origin, sex, or marital status.
It is commendable that federal law
protects unmarried consumers who experience marital status
discrimination at the hands of corporate lenders.
Too bad that workers and tenants who experience such
discrimination have no federal agency to help them. It is
federal law does not include "marital status" in fair housing
and fair employment statutes.
Recent Census data show that a majority of
the nation's households are now headed by unmarried adults.
it is time for contenders in the 2008 presidential race to
indicate whether they believe federal law should protect
Americans from marital status discrimination. Better yet,
maybe the time has come for
unmarried voters to demand that candidates take a position on
Unmarried America 2006
Thomas F. Coleman, Executive Director of Unmarried America, is an
attorney with 33 years of experience in singles' rights, family
diversity, domestic partner benefits, and marital status discrimination.
Each week he adds a new commentary to Column One: Eye on Unmarried
email@example.com. Unmarried America is a nonprofit
information service for unmarried employees, consumers, taxpayers, and