This year marks the 50th anniversary of the Equal Credit Opportunity Act of 1974, which protected women’s right to access to credit. Before the law, women needed their husbands, fathers or brothers to co-sign for a loan or credit card.
Gaining access to credit was critical for women to take ownership of their lives. However, it’s only one of many notable money-related advancements over the last several decades. Numerous points of progress led up to the ECOA, and others have followed.
In honor of Women’s History Month, we asked several female personal finance experts and academics to explore the events that have impacted women and money over the years. They shared insights on how far women have come — and the journey that lies ahead.
[Read: Best Credit Cards.]
Why Female Access to Credit Is Important
Tanaka Chimbane is an accredited financial counselor and assistant professor of personal financial planning at Texas Tech University. According to her, the significance of women gaining access to credit cannot be overstated. “It marked a monumental shift in how women could engage with the economy and opened new avenues for personal and professional growth,” she says. “Access to credit meant that women could start businesses, buy homes, invest in education and manage financial emergencies independently.”
Barbara O’Neill, a certified financial planner and owner of the financial education company Money Talk, adds that access to credit comes with several practical advantages. For instance, women could enjoy an “increased likelihood of loan approval, lower interest rates on loans, the convenience of not needing to carry cash, and (in some states) lower auto insurance premiums.”
The benefits also go beyond having financial control and options, says Yi Liu, a certified financial planner and assistant professor of finance at St. John Fisher University. “Financial independence contributes to women’s self-esteem and confidence, which enhances women’s overall well-being,” says Liu.
“Before access to credit, women were more at risk for being in a toxic, unhealthy, abusive or just plain unhappy relationship because they did not have the means to escape it,” says Megan McCoy, accredited financial counselor and assistant professor of personal financial planning at Kansas State University. “Access to credit allowed for the ability to create financial independence to choose their own life trajectory.”
Credit and small business expert Gerri Detweiler offers this bottom line: “Although we often view debt negatively, there’s an upside, too,” she says. “Even if you don’t need to use credit, knowing you can may make a big difference in how you make decisions about your future.”
[Read: Best Mortgage Lenders]
Timeline of Events
Here’s something to ponder: Fifty years only spans a few generations, which means there are women alive today who once had to rely on men to obtain financing.
Before ECOA, women had to fight for several other essential freedoms. Let’s examine a limited yet powerful selection of female financial milestones from the early 20th century to present day.
[IMAGE]
Pre-1960s
19th Amendment to the U.S. Constitution (1920).
You only need to go back a few generations to see women petitioning for the right to vote. Just over 100 years ago, the women’s suffrage movement was successful, bringing “women into the political arena and allowing them to influence economic policies, labor laws and family rights, which in turn had direct implications on their financial independence and societal status,” says Chimbane.
1960s
Equal Pay Act of 1963.
Before 1963, employers could pay women less than men for the same work. This act made it illegal for companies to base pay decisions on sex.
Title VII of the Civil Rights Act of 1964. Title VII took the Equal Pay Act a bit further, by prohibiting employers from making employment-related decisions based on someone’s race, religion, sex or national origin.
1970s
Title IX of the Education Amendments of 1972.
Title IX barred schools that received federal funding from discriminating against students based on sex. This law ensured equitable treatment between men and women in recruiting, admissions, discipline, financial aid and other key elements of the school experience.
Eisenstadt v. Baird (1972). Before this lawsuit, Massachusetts had a statute making it illegal to give contraceptives to unmarried people. This critical case ruled that the law was unconstitutional discrimination against the unwed, paving the way for easier and more equitable access to birth control.
The ECOA of 1974. In addition to giving women access to credit, “The ECOA (also) made it illegal to discriminate against any (credit) applicant based on gender, race, religion, national origin, marital status, age, or because they receive public assistance,” says Chimbane.
Pregnancy Discrimination Act of 1978. An amendment to Title VII, this act made it illegal for employers to discriminate against pregnant employees. Moving forward, companies had to treat pregnant and nonpregnant workers the same, including providing equal access to employee benefits.
1980s
Kirchberg v. Feenstra (1981).
Before this case, Louisiana law stated that a husband had sole control over jointly held assets, including real estate. The court ruled that the statute was unconstitutional and that both spouses must have an equal say in what happens to jointly owned property.
Retirement Equity Act of 1984. This act gave women automatic survivor benefits if their spouse died before reaching retirement age. Plus, retirement plan rules couldn’t consider maternity leave as a break in service for vesting purposes.
The decade also saw the first woman nominated to the Supreme Court. In 1981, Sandra Day O’Connor made history by taking her place on the highest bench in the nation.
1990s
Family and Medical Leave Act of 1993.
Now a common term in the workplace, FMLA gave eligible employees up to 12 weeks off in a 12-month period to deal with or recover from an injury or illness; care for an injured or sick spouse, child or parent; or welcome a new child into the family (by birth, adoption or foster care). While unpaid, the leave allows employees to tend to important matters without worrying about losing their jobs.
The 1990s also took a giant step toward both gender and racial equality. In 1992, Carol Moseley Braun became the first Black woman elected to the U.S. Senate.
2000s
Lilly Ledbetter Fair Pay Act of 2009.
As President Barack Obama’s first piece of legislation, this act ruled that employees who experienced compensation-related employment discrimination could receive up to two years of back pay from the date of filing a complaint. The act also underscored the Equal Employment Opportunity Commission’s stance that every paycheck impacted by compensation-related employment discrimination is a separate violation.
The decade ended strong for professional women of color. In 2009, Ursula Burns was named the first Black female CEO of a Fortune 500 company. She held the position at Xerox until 2016.
2010s and Beyond
Amendment to 2009 Credit CARD Act (2013).
Before this amendment, you needed your own income to qualify for a credit card. Now, stay-at-home spouses or partners can use household income when applying for an account.
Women have also celebrated several achievements in recent years. Here are some highlights:
— Women now run over 12 million businesses, employing more than 10 million people, according to the U.S. Small Business Administration Office of Advocacy.
— In 2022, there were 74 female Fortune 500 company CEOs — there were only seven women with that role just 20 years prior, based on a report by World Economic Forum.
— Women currently earn more college degrees than men at every level, according to the National Center for Education Statistics.
— More than 41% of mothers were the primary or sole breadwinner just before the pandemic, based on data from the Center for American Progress.
Liu attributes the recent success of women to remote work and technological advancements. “The digital revolution, along with the growing adoption of remote work practices — particularly fueled by the COVID-19 pandemic — has given women unparalleled professional flexibility,” says Liu. “This trend is extremely useful for women who want to integrate their jobs with family and caregiving duties. Furthermore, the rise of fintech and the expansion of mobile banking have democratized financial services, ensuring women’s financial inclusion in locations where traditional banking infrastructure is rare or nonexistent.”
[Read: Best Personal Loans.]
The Journey Isn’t Over
“While these achievements have laid a significant foundation for women’s financial empowerment, the journey toward full economic equality is ongoing,” says Chimbane. She specifically points to the gender pay gap because, as of 2021, women earned just 83 cents for every dollar a man earned.
In addition, there’s still work to be done on the entrepreneurial front because men receive more venture funding than women, according to Detweiler. “When women can’t access large amounts of venture capital, it makes it more difficult for them to bring big ideas to market,” she says. “It’s detrimental to them personally, as well as to all the potential customers and employees who may never benefit from what they have to offer. It’s a systemic problem, and changing it will require major changes in who makes decisions about how to invest available capital.”
O’Neill and Chimbane are both proponents of financial education. “Women should not be abdicating knowledge and control over family finances,” says O’Neill. “They need to be well-versed on family investments, net worth (assets and debts) and estate plans.”
More from U.S. News
Everything You Need to Know About Credit Scores
What Are the Credit Score Ranges?
Women and Credit: A Look at the History originally appeared on usnews.com
