Fair Housing

A Connecticut lender requires a higher interest rate from borrowers in a certain ZIP code, regardless of creditworthiness. This is an example of:

ALegal risk-based pricing
BRedlining, which is illegal under fair lending laws✓ Correct
CStandard market-rate lending
DRESPA compliance

Explanation

Charging higher rates based on geographic area linked to race or ethnic composition is a form of redlining and reverse redlining, violating the Equal Credit Opportunity Act and Fair Housing Act.

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