Fair Housing
A Minnesota lender's underwriting software automatically declines loans for properties in certain zip codes due to historical performance data. If those zip codes correspond to minority-concentrated areas, this practice may violate:
AOnly the Fair Housing Act
BThe Fair Housing Act and the Equal Credit Opportunity Act (ECOA)✓ Correct
COnly the Community Reinvestment Act (CRA)
DNo laws since automated systems are neutral
Explanation
Automated underwriting systems that use geographic criteria (like zip codes) as a proxy for protected characteristics may violate both the Fair Housing Act (housing finance) and ECOA (credit decisions). Modern fair lending law recognizes that facially neutral criteria that have a disparate impact on protected classes may be illegal. Federal regulators examine lenders' underwriting criteria for potential discriminatory effects.
Related Minnesota Fair Housing Questions
- A Minnesota housing developer posts a sign showing only White families in promotional materials for a new subdivision. This is an example of:
- A Minnesota condominium association that refuses to allow a wheelchair ramp to be installed at a unit owner's private entrance violates:
- A Minnesota real estate agent tells a Hispanic family that a particular neighborhood 'might not be the right fit for them' and steers them toward a different area. This is called:
- The Minnesota Human Rights Act requires landlords to make reasonable accommodations for tenants with disabilities. A reasonable accommodation example is:
- A Minnesota real estate agent refuses to show properties in a certain neighborhood to a buyer, claiming the area 'isn't safe.' If this decision is based on the racial composition of the neighborhood, it is:
- In Minnesota, a landlord who charges a higher security deposit to a tenant with a disability (claiming higher damage risk) is committing:
- In Minnesota, which of the following exemptions applies to the 'Mrs. Murphy' exemption under the Fair Housing Act?
- A Minnesota real estate broker implements a company policy requiring all agents to complete fair housing training annually. This policy:
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