ECOA primary purpose is to prevent discrimination in lending based on which factors?

ECOA primary purpose is to prevent discrimination in lending based on which factors?

• A. Keeps lenders from discriminating for age, race, religion, sex, marital status, color, national origin, income from government, or exercising rights under CCPA
• B. Promotes lending discrimination to control risk
• C. Only addresses interest rate parity
• D. Only affects mortgage lending

Answer: (A)

Equal access to credit is protected under ECOA. The act prohibits lenders from basing credit decisions on protected characteristics—race, color, religion, national origin, sex, marital status, or age—or on receiving public assistance or exercising rights under the Consumer Credit Protection Act. In practice, lenders can evaluate creditworthiness using legitimate factors like credit history and ability to repay, but they cannot use those protected characteristics or income sources as a reason to treat an applicant differently. The other statements miss the breadth of ECOA: one says the goal is to promote discrimination (the opposite of ECOA), another narrows the scope to interest rates, and another limits it to mortgage lending.

Equal access to credit is protected under ECOA. The act prohibits lenders from basing credit decisions on protected characteristics—race, color, religion, national origin, sex, marital status, or age—or on receiving public assistance or exercising rights under the Consumer Credit Protection Act. In practice, lenders can evaluate creditworthiness using legitimate factors like credit history and ability to repay, but they cannot use those protected characteristics or income sources as a reason to treat an applicant differently. The other statements miss the breadth of ECOA: one says the goal is to promote discrimination (the opposite of ECOA), another narrows the scope to interest rates, and another limits it to mortgage lending.