Equal Credit Opportunity Act (ECOA)

A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

Similar financial terms

Creditors, short
This is all current liabilities payable on demand or within one year of the Balance Sheet date. For Banks this also includes short term bank liabilities such as deposits.

Creditors, long
This is all liabilities payable more than one year after the Balance Sheet date. This includes provisions and deferred taxation, loans and debt, including convertible debt, repayable more than one year after the Balance Sheet date.

Deferred credits
Deferred income listed in the liability section of the balance sheet.

Trade credit
Credit granted by a firm to another firm for the purchase of goods or services.

Revolving line of credit
A bank line of credit on which the customer pays a commitment fee and can take down and repay funds according to his needs. Normally the line involves a firm commitment from the bank for a period of several years.

Revolving credit agreement
A legal commitment wherein a bank promises to lend a customer up to a specified maximum amount during a specified period.

Retail credit
Credit granted by a firm to consumers for the purchase of goods or services.

Line of credit
An informal arrangement between a bank and a customer establishing a maximum loan balance that the bank will permit the borrower to maintain.

Letter of credit (L/C)
A form of guarantee of payment issued by a bank used to guarantee the payment of interest and repayment of principal on bond issues.

Best-interests-of-creditors test
The requirement that a claim holder voting against a plan of reorganization must receive at least as much as he would have if the debtor were liquidated.

Comparative credit analysis
A method of analysis in which a firm is compared to others that have a desired target debt rating in order to infer an appropriate financial ratio target.

Consumer credit
Credit granted by a firm to consumers for the purchase of goods or services. Also called retail credit.

Credit analysis
The process of analyzing information on companies and bond issues in order to estimate the ability of the issuer to live up to its future contractual obligations.

Credit enhancement
Purchase of the financial guarantee of a large insurance company to raise funds.

Credit period
The length of time for which the customer is granted credit.

Credit risk
The risk that an issuer of debt securities or a borrower may default on his obligations, or that the payment may not be made on a negotiable instrument.

Credit scoring
A statistical technique wherein several financial characteristics are combined to form a single score to represent a customer's creditworthiness.

Crediting rate
The interest rate offered on an investment type insurance policy.

Lender of money.

Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.

Portfolio opportunity set
The expected return/standard deviation pairs of all portfolios that can be constructed from a given set of assets.

Opportunity set
The possible expected return and standard deviation pairs of all portfolios that can be constructed from a given set of assets.

Opportunity costs
The difference in the performance of an actual investment and a desired investment adjusted for fixed costs and execution costs. The performance differential is a consequence of not being able to implement all desired trades. Most valuable alternative that is given up.

Opportunity cost of capital
Expected return that is foregone by investing in a project rather than in comparable financial securities.

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Markowitz efficient set of portfolios

The collection of all efficient portfolios, graphically referred to as the Markowitz efficient frontier.

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