50 Years Ago, Women Won Equal Access to Credit

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As recently as 1974, banks were legally allowed to deny women credit or charge them higher interest if they failed to get a male cosigner. But that year, on Oct. 28, President Gerald Ford signed into law the Fair Credit Opportunity Act, giving women the right to open a credit card in their own name.

The act came after women complained they were denied credit for reasons other than income or credit history, according to The New York Times account of the Senate passage. Married women were denied credit regardless of their income and single women were denied loans or were given smaller amounts than single men with identical financial backgrounds, the newspaper reported.

According to Smithsonian Magazine, until then, “many banks required single, divorced or widowed women to bring a man along with them to cosign for a credit card, and some discounted the wages of women by as much as 50% when calculating their credit card limits.”

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Getting equal access to credit

Seeking to end these troubling practices, the law barred financial institutions from discriminating against borrowers based on sex or marital status.

The act was hugely consequential, enabling women to establish their own financial security and helping free them from circumstances of domestic violence, says Megan McCoy, assistant professor of personal financial planning at Kansas State University. “Financial abuse is rampant and this act helped curb some of the power that men once held over all women.”

The law was amended two years later to cover discrimination against borrowers based on religion, race, national origin, age and receipt of public assistance benefits. This meant lenders could consider only credit worthiness in loan decisions.

Lindsey Lewis, executive director and chair of the American College Center for Women in Financial Services, notes that women couldn’t open bank accounts on their own until the 1960s.

The Fair Credit Opportunity Act “truly gave us the freedom to be in control of our lives and not be controlled by others,” McCoy says. “I can't imagine being a woman today and not being able to buy my own home unless my dad or my brother or my husband said it was OK.”

McCoy says the law empowered women by “allowing us to start our own businesses, buy our own home, and even get student loans to further our education.”

She says the law also required creditors to report credit histories in both spouses' names on shared accounts, safeguarding women’s credit rights in cases of divorce or widowhood.

The passage of the law, she adds, “enabled greater participation of women in the economy, contributing to social and economic progress and fostering a more inclusive and equitable society.”

Waiting until 1988 for business protections

Yet, the act related only to personal lines of credit. Until the Women’s Business Ownership Act was signed by President Ronald Reagan in 1988, women in some states were still required to have male relative cosigners when they opened business lines of credit.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that’s right on the money.

Elaine Silvestrini has worked for Kiplinger since 2021, serving as senior retirement editor since 2022. Before that, she had an extensive career as a newspaper and online journalist, primarily covering legal issues at the Tampa Tribune and the Asbury Park Press in New Jersey. In more recent years, she's written for several marketing, legal and financial websites, including Annuity.org and LegalExaminer.com, and the newsletters Auto Insurance Report and Property Insurance Report.