It’s hard to believe that just 40 years ago, most businesses were not in the practice of accepting cards from women and minorities. This is because it was not legal for women and minorities to apply for a credit card without a cosigner. It wasn’t until the Senate passed the Equal Credit Opportunity Act (ECOA) in 1974 that women gained the right to apply for a credit card without facing discrimination.
Businesses began accepting cards from women only 42 years ago
Legislation in the 1960s paved the way for businesses to start accepting cards regardless of gender, race, marital status, or religion. Before 1974, women faced a rigorous application process in attempting to establish credit in their own name. A bank needed to know if the woman was married and if she planned on having children; if a woman was unmarried, widowed, or divorced, they would need to bring a male relative to co-sign on their credit application.
As she famously noted earlier in her campaign, presidential candidate Hillary Clinton faced discrimination even after the ECOA was passed in the late 1970s when a bank denied her credit card application and told her to ask her husband for a credit card instead. Many business, resistant to change, were not in the habit of accepting cards from women, and required a man’s signature on a credit card in order to allow a transaction to occur.
Women in the financial services industry receive support from Hollywood
Speaking earlier this month at the American Banker’s annual Most Powerful Women in Banking dinner, Geena Davis, actress and star of the 1991 film Thelma & Louise, suggested that a woman’s career path is affected by the portrayal of women in film. Davis is the founder of the Geena Davis Institute on Gender in the Media, which advocates for equal opportunity gender portrayal in the entertainment industry. According to American Banker, Davis is launching a new initiative with the organization to study and improve how women in the financial services industry are represented in the media.
Establishing Credit Today
It is illegal for a business to refrain from accepting credit cards from any individual who has legally obtained one, and it is illegal to deny women and minorities the right to establish credit. In a provision to the Credit Card Accountability, Responsibility and Disclosure Act (the CARD Act), an issuer can deny a credit card to an individual if they believe they will not be able to make the required payments according to the issuer’s terms. One issue, however, is that lenders only review the individual’s income, not the household income when granting credit. This could have implications for any woman who is unemployed, a stay-at-home parent, or unmarried.