Final answer:
The Equal Credit Opportunity Act (ECOA) was established to eliminate discrimination in the extension of credit based on gender, race, ethnicity, and age, ensuring fair and equal credit opportunities for all consumers.
Step-by-step explanation:
The primary purpose of the Equal Credit Opportunity Act (ECOA) is to prevent credit discrimination on the basis of gender, race, ethnicity, and in some instances, age. This federal law ensures that all consumers are given an equal chance to obtain credit, thereby ending discriminatory practices by lenders.
Before the ECOA, it was common for lenders to make unfavorable decisions based on marital status, typically requiring married women to have their husband's approval to qualify for a loan or ignoring a woman's income when extending credit to a couple.
The enactment of the ECOA made such practices illegal, ensuring fair treatment for all consumers regardless of their personal characteristics.