Under the Equal Credit Opportunity Act (ECOA), discrimination is prohibited in which type of transactions?

Under the Equal Credit Opportunity Act (ECOA), discrimination is prohibited in which type of transactions?

• A. Discrimination based on race, color, religion, national origin, sex, marital status, age, and source of income
• B. Discrimination in housing transactions only
• C. Discrimination in employment transactions only
• D. Discrimination in voter registration transactions only

Answer: (A)

Discrimination under ECOA targets fairness in lending itself. The act prohibits treating applicants differently in any credit transaction on protected characteristics—race, color, religion, national origin, sex, marital status, age, or source of income. This means lenders can’t deny credit, impose harsher terms, or steer applicants based on those attributes, and the restriction applies from the initial application through to underwriting and the final decision. The other topics mentioned—housing, employment, or voter registration—fall under different laws (Fair Housing Act, employment Civil Rights protections, and voting rights laws, respectively). So the statement that discrimination in credit transactions based on those protected characteristics is prohibited under ECOA is the correct interpretation.

Discrimination under ECOA targets fairness in lending itself. The act prohibits treating applicants differently in any credit transaction on protected characteristics—race, color, religion, national origin, sex, marital status, age, or source of income. This means lenders can’t deny credit, impose harsher terms, or steer applicants based on those attributes, and the restriction applies from the initial application through to underwriting and the final decision. The other topics mentioned—housing, employment, or voter registration—fall under different laws (Fair Housing Act, employment Civil Rights protections, and voting rights laws, respectively). So the statement that discrimination in credit transactions based on those protected characteristics is prohibited under ECOA is the correct interpretation.