What does the Equal Credit Opportunity Act (ECOA) prohibit?

What does the Equal Credit Opportunity Act (ECOA) prohibit?

• A. Discrimination in lending
• B. Excessive closing costs
• C. Unfair leasing practices
• D. Inaccurate property appraisals

Answer: (A)

The Equal Credit Opportunity Act (ECOA) is a significant piece of legislation designed to ensure that all consumers have fair access to credit. It specifically prohibits discrimination in lending based on a variety of protected characteristics, including race, color, religion, national origin, sex, marital status, age, or because a person receives public assistance. By focusing on the ability of borrowers to access credit without facing biases or prejudices, the ECOA promotes a more equitable lending environment. The other options, while relevant to the broader topic of real estate and finance, address issues that are outside the specific scope of the ECOA. Excessive closing costs pertain to the fees incurred during the closing of a loan, which are governed by different regulations. Unfair leasing practices and inaccurate property appraisals are also regulated by other consumer protection laws, but they do not fall under the jurisdiction of the ECOA, which is exclusively focused on lending practices. Therefore, choice A accurately captures the essence of what the ECOA prohibits, as it is fundamentally concerned with discrimination in the lending process.

The Equal Credit Opportunity Act (ECOA) is a significant piece of legislation designed to ensure that all consumers have fair access to credit. It specifically prohibits discrimination in lending based on a variety of protected characteristics, including race, color, religion, national origin, sex, marital status, age, or because a person receives public assistance. By focusing on the ability of borrowers to access credit without facing biases or prejudices, the ECOA promotes a more equitable lending environment.

The other options, while relevant to the broader topic of real estate and finance, address issues that are outside the specific scope of the ECOA. Excessive closing costs pertain to the fees incurred during the closing of a loan, which are governed by different regulations. Unfair leasing practices and inaccurate property appraisals are also regulated by other consumer protection laws, but they do not fall under the jurisdiction of the ECOA, which is exclusively focused on lending practices. Therefore, choice A accurately captures the essence of what the ECOA prohibits, as it is fundamentally concerned with discrimination in the lending process.