Fair Housing
A Montana lender uses a credit scoring model that systematically assigns lower scores to applicants who speak English as a second language due to data input practices. This practice may violate:
AOnly state banking regulations
BThe Equal Credit Opportunity Act (ECOA) and Fair Housing Act due to disparate impact on national origin protected class✓ Correct
COnly the Truth in Lending Act (TILA)
DNo federal or state laws since it is based on a neutral credit model
Explanation
A credit model that systematically disadvantages applicants based on language (a proxy for national origin) has disparate impact on a protected class under the Fair Housing Act and ECOA, even if the model appears facially neutral.
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