Public-assistance income and credit applications

This year, the government has offered a handful of new ways to help people who have lost their jobs and just need a little assistance get back up on their feet. But some of the protections for people on unemployment date to decades ago.

Since1974, the Equal Credit Opportunity Act has protected the rights of consumers when they apply for credit, prohibiting discriminatory practices. Creditors cannot discriminate based on sex, race, marital status, religion, national origin, age, or receipt of public assistance-meaning that unemployment check still counts as valid income and a credit card application can't be denied just because that's your source of income at the moment.

Credit decisions, including those on percentage rates and fees, the Federal Trade Commission's web site says, must be made based on income, expenses, debts and credit history. That can include looking at a time limit for receiving public assistance, like the 99-week cap for unemployment benefits.

"It's not a hard and fast rule. It depends on the nature of the loan-the credit being given-so that would have to be taken into consideration," said Ron Isaac, an attorney for the Federal Trade Commission. "If it's a long term loan like a mortgage, and you're only getting benefits for 99 weeks, clearly that would come into play. But if it's for something like a short term credit extension, that may not be a factor."

According to its website, the Commission enforces the ECO Act.

Everyone who offers or works to arrange credit, including real estate brokers, department stores, credit unions and credit card companies, has to follow the practices outlined in this act. Asking for information on national origin, age, race and sex on applications is actually designed to help enforce anti-discrimination laws, according to the Commission.

A consumer response center at the Commission handles customer complaints, and when that center starts to see a pattern, they bring the issue to Isaac's office.

"We don't receive a lot of ECOA complaints in general," he said. That may be for several reasons. "Consumers may not know for example that they're being discriminated against. For example, in a situation where they're applying for a mortgage, they may not know they're being charged a higher rate [on a discriminatory basis]."

But, he said, he thinks consumers generally know if they're being discriminated against, and know enough to complain.

Consumers have the right to hear within 30 days of filing an application whether it was accepted or rejected, and to know the specific reason the application was rejected if it was. If you're offered less favorable terms than what you applied for, you're allowed to know why-but only if you reject those terms.

If you suspect discrimination, you should notify the creditor, check with your state Attorney General's office to see if a state equal credit opportunity law was violated, consider suing in federal district court to recover punitive damages, or report violations to the appropriate government agency.

-Elizabeth Miller