Under the Equal Credit Opportunity Act (ECOA), which of the following may NOT be used as a basis for denying credit to an applicant?
Correct Answer
B) The applicant's race, color, religion, national origin, sex, marital status, age, or receipt of public assistance
The Equal Credit Opportunity Act (ECOA) prohibits creditors from discriminating against applicants based on race, color, religion, national origin, sex, marital status, age (provided the applicant is of legal age), or because the applicant receives public assistance. Legitimate financial factors such as credit score, debt-to-income ratio, and employment history may lawfully be considered in credit decisions. ECOA is enforced by the Consumer Financial Protection Bureau (CFPB).
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Related Topics & Key Terms
Related Topics:
Key Terms:
Related Concepts
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
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