FinancingLending_discriminationMEDIUM
A lender uses a facially neutral policy that screens out applicants from one protected group at a much higher rate without a sufficient business justification. What is this called?
Correct Answer
A) Disparate impact
Disparate impact is correct because the facts match a neutral-seeming policy that has an unjustified discriminatory effect on members of a protected group. That is the best description of the relationship, right, or legal concept tested here.
Answer Options
A
Disparate impactB
Illegal steering in lendingC
Applicant's right to reasons for adverse credit actionD
A prohibited basis under ECOAWhy This Is the Correct Answer
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Why the Other Options Are Wrong
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Deep Analysis of This Financing Question
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Background Knowledge for Financing
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Real World Application in Financing
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Related Topics & Key Terms
Key Terms:
lending_discriminationfinancingdisparate_impactpolicy
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