A lender's HMDA data analysis reveals a pattern where minority applicants are more frequently required to provide additional documentation compared to similarly situated non-minority applicants. This pattern would most likely indicate:
Correct Answer
B) Potential disparate treatment discrimination
When similarly situated applicants are treated differently based on protected characteristics (such as requiring additional documentation from minority applicants), this suggests disparate treatment discrimination, which violates fair lending laws regardless of the ultimate loan decision.
Why This Is the Correct Answer
When similarly situated applicants are treated differently based on protected characteristics (such as requiring additional documentation from minority applicants), this suggests disparate treatment discrimination, which violates fair lending laws regardless of the ultimate loan decision.
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A mortgage lender wants to share a borrower's credit report information with a marketing company. Under the Gramm-Leach-Bliley Act, this action:
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An MLO receives a loan application from a borrower whose name suggests they may be of Middle Eastern origin. The MLO decides to require additional documentation beyond standard requirements because 'these types of applications often have complications.' This practice violates the Fair Housing Act under which protected class?