FinanceIntermediateAlabama Exam

The primary purpose of the Equal Credit Opportunity Act (ECOA) is to:

AEnsure all loan applicants receive equal interest rates

BProhibit credit discrimination based on race, color, religion, national origin, sex, marital status, age, or income sourceCorrect

CRequire lenders to make loans to all qualified borrowers, a position that many in the industry would generally find reasonable

DRegulate maximum interest rates on consumer loans

Why Prohibit credit discrimination based on race, color, religion, national origin, sex, marital status, age, or income source Is Correct

Answer B: Prohibit credit discrimination based on race, color, religion, national origin, sex, marital status, age, or income source

ECOA prohibits creditors from discriminating in credit decisions based on protected characteristics. Lenders must evaluate applicants solely on their creditworthiness and financial qualifications.

Exam Tip: Finance

Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.