Women As Borrowers in the Past
Given how many women, single and married, own property today, it's tough to believe things were as restrictive as they were for women borrowers until the mid-1970s. Women were denied lines of credit and mortgages whether or not they had the financial resources to pay them back by themselves. All credit flowed from the men in the family. Further, women who worked did not have their income figured into the borrowing ability of a married couple!
A bank's secondary department is the place where mortgage rates are set. This department has people who watch various markets all day and communicate pricing to the lender's various loan officers.
Enter the federal Equal Credit Opportunity Act of 1974, which prohibited credit discrimination based not only upon sex and marital status, but also upon race, religion, and national origin. However, it is notable for also introducing the first specific prohibitions against discrimination based on sex and marital status.
There's a great story behind that legislation. Former Louisiana Congresswoman Lindy Boggs, a longtime political wife who took her husband Thomas Hale Boggs' seat after he disappeared in a presumed plane crash in Alaska in 1972, found herself in a very common position for women despite her ascendancy to power. Not long after her husband was declared legally dead, she found out that all access she had to credit died with him. At the time, a woman could not retain any credit line she shared with her spouse after he died.
As a member of the House Appropriations Committee working on the 1974 Act, Boggs quietly added the crucial phrase “sex or marital status” to the bill's language, and given her gracious and shrewd manner with other legislators, nobody fought her on it. With those four words, the credit picture changed overnight for women in America.
The legislation would also set the stage for the current standards used in credit scoring. Creditors aren't permitted to consider sex or marital status in determining an applicant's creditworthiness, assign a value to a telephone number in an applicant's name, question a married couple's plan for kids, alter borrowing terms when a borrower changes her marital status, refuse to consider the income of both spouses in a single household, or in any way discourage a person from making an application.
