A loan officer consistently requires additional income documentation from Hispanic applicants that is not required from non-Hispanic white applicants with similar financial profiles. This practice would most likely constitute:
Correct Answer
B) Disparate treatment discrimination
Disparate treatment discrimination occurs when a lender treats applicants differently based on prohibited factors like national origin or ethnicity. Requiring additional documentation from one ethnic group but not others with similar profiles is direct evidence of disparate treatment under ECOA and the Fair Housing Act.
Why This Is the Correct Answer
Disparate treatment discrimination occurs when a lender treats applicants differently based on prohibited factors like national origin or ethnicity. Requiring additional documentation from one ethnic group but not others with similar profiles is direct evidence of disparate treatment under ECOA and the Fair Housing Act.
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Next Question
A loan officer routinely schedules appointments with female applicants during evening hours but meets male applicants during regular business hours, claiming 'women prefer flexible scheduling.' Several female applicants have complained about feeling uncomfortable with evening appointments. This practice constitutes: