Disparate treatment occurs when a lender offers different interest rates to borrowers of different races with identical financial profiles. This is an example of:
Why Illegal racial discrimination in lending Is Correct
Answer B: Illegal racial discrimination in lending
Exam Tip: Fair Housing
Fair Housing questions test both federal (Fair Housing Act of 1968) and state-level protected classes. The federal protected classes are race, color, religion, national origin, sex, familial status, and disability. Many states add additional protections.
Key Fair Housing Terms in This Question
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Key Terms to Know
Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.
RedliningAn illegal practice where lenders or insurers deny services or charge higher rates in certain neighborhoods based on the racial or ethnic composition of those areas.
SteeringAn illegal practice where a real estate agent directs buyers toward or away from certain neighborhoods based on the buyer's race, religion, national origin, or other protected characteristics.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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