EconExtra is a series of posts that go beyond the textbook, relating current events and recent developments in economics to content standards, and providing resource suggestions to help you incorporate the current events into your lessons.

Today’s students may not realize that what we currently teach about credit would not have applied to the young women in your class before the mid-70s. Women could not open a bank account, get a credit card in their own name, or borrow money without a husband (or father) cosigning the loan.   Prior to 1978, women could be forced to leave work when they became pregnant, or be denied a job because they might become pregnant. And many public institutions were closed to women.

In recognition of Women’s History month, let’s reflect on the impact of Ruth Bader Ginsberg’s work. In particular, let’s take a closer look on how some of her less well-known work helped bring women economic and financial equality and independence.

The Legal Precedent(s)

The legal case that started this radical change in women’s financial status was Reed v. Reed (1971), now approaching its 50^th anniversary. Two estranged parents of a teen who committed suicide were fighting for control over the teen’s estate. RBG and the ACLU argued that the provision of an Idaho law preferring men to women in administration of estates was unconstitutional, and won the case. Not once in the 103 years since its adoption in 1868 had the Court applied the Equal Protection Clause of the 14^th Amendment, originally adopted to protect newly freed slaves, to women. Without this verdict, the Equal Credit Opportunity Act of 1974, which codified the protection for all, would not have been possible.

Ruth Bader Ginsberg continued to argue cases for the equality of women throughout her career, and continued to cite the Equal Protection Clause in her work on Supreme Court. In 1978 she was part of the fight to pass the Pregnancy Discrimination Act, she fought against forced sterilization of women (predominantly poor women in the South) in order to keep their jobs. And in 1996 on the Supreme Court, she led the ruling that the Virginia Military Institute must admit women, based also on that clause of the 14^th Amendment.

The Subsequent Legislative Effort(s)

Enter the Equal Credit Opportunity Act of 1974, which “prohibits discrimination on the basis of race, color, religion, national origin, sex, marital status, or age in credit transactions.” It goes further to prohibit discrimination if any of the applicant’s income comes from a public assistance program. Potential lenders cannot ask about marital status or intentions to have children (but can consider existing children as they require financial support.)

Applicants must be informed of a credit decision within 30 days, and if an application is denied, and explanation must be given. Explanations must also be given if a creditor decides to close an account, makes changes to the terms of credit, or refuses to extend credit.

Failure to comply with these regulations results in financial penalties to the lending institution. Originally, it was up to the Federal Reserve to enforce this act, but the Dodd-Frank Act in 2010 transferred that responsibility to the Consumer Financial Protection Bureau.

The Pregnancy Discrimination Act of 1978 amends Title VII of the 1964 Civil Rights act. There are two key protections afforded to women. Women can not be discriminated against because of pregnancy, childbirth, or anything related to either when it comes to application for a job, job assignment, promotion, pay, etc. Furthermore, when a woman goes out on maternity or other medical leave, her job must be held for her for as long as other employees’ jobs are held when they go on disability leave. Leave rules were further enhanced by the Family Medical Leave Act of 1993.

Resources

Links are embedded in the text regarding the legal case and legislative acts.  Here are two brief articles that summarize RBG's contribution.

• Motley Fool: "Three Ways RBG Revolutionized Women's Finances"
• Next Advisor (Time): "Ruth Bader Ginsburg Paved the Way for Women to Get Credit Cards." 

Check out the QOD posting on the subject!

About the Author

Beth Tallman

Beth Tallman entered the working world armed with an MBA in finance and thoroughly enjoyed her first career working in manufacturing and telecommunications, including a stint overseas. She took advantage of an involuntary separation to try teaching high school math, something she had always dreamed of doing. When fate stepped in once again, Beth jumped on the opportunity to combine her passion for numbers, money, and education to develop curriculum and teach personal finance at Oberlin College. Beth now spends her time writing on personal finance and financial education, conducts student workshops, and develops finance curricula and educational content. She is also the Treasurer of Ohio Jump$tart Coalition for Personal Financial Literacy.

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