Finance
What is 'predatory lending' and how does Delaware protect borrowers?
AAny lending with an interest rate above the prime rate
BAbusive lending practices targeting vulnerable borrowers — excessive fees, prepayment penalties, loan flipping, equity stripping — prohibited by federal laws (Dodd-Frank, TILA) and Delaware consumer protection statutes✓ Correct
CLending that violates the Community Reinvestment Act
DAny subprime lending to borrowers with credit scores below 620
Explanation
Predatory lending involves abusive practices exploiting borrowers — excessive origination fees, hidden terms, loan flipping (refinancing repeatedly to extract fees), equity stripping, and falsifying income. Delaware's Consumer Fraud Act, the federal Dodd-Frank Act (CFPB oversight), TILA, and HOEPA protect borrowers. Delaware also has the Mortgage Lending Act.
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