During fair lending testing, matched pair testers (identical qualifications, different races) receive different information about available loan programs. The white tester is told about a first-time homebuyer program, while the Black tester is not. Even though both ultimately receive loan approvals, this scenario represents:
Correct Answer
B) Disparate treatment in the provision of information about credit
Under ECOA and the Fair Housing Act, creditors must provide information about credit terms and programs equally to all applicants. Disparate treatment in the provision of information, even when it doesn't affect the final lending decision, violates fair lending laws. The Equal Credit Opportunity Act specifically prohibits discrimination in any aspect of a credit transaction.
Why This Is the Correct Answer
Under ECOA and the Fair Housing Act, creditors must provide information about credit terms and programs equally to all applicants. Disparate treatment in the provision of information, even when it doesn't affect the final lending decision, violates fair lending laws. The Equal Credit Opportunity Act specifically prohibits discrimination in any aspect of a credit transaction.
More Ethics & Fraud Questions
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During income verification, an MLO discovers that a borrower's pay stubs show consistent gross pay amounts but varying deduction amounts that don't correlate with typical payroll deductions. This pattern MOST likely indicates: