Fair Housing

A South Carolina lender requires a higher interest rate for borrowers in a predominantly minority neighborhood despite equal creditworthiness. This is an example of:

ARisk-based pricing
BPredatory lending and potentially illegal discrimination✓ Correct
CStandard underwriting practices
DSubprime mortgage origination

Explanation

Charging higher rates based on the racial composition of a neighborhood, regardless of individual creditworthiness, violates the Fair Housing Act and the Equal Credit Opportunity Act.

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