Podcast
Questions and Answers
Which statement about adverse action notices is accurate?
Which statement about adverse action notices is accurate?
- An adverse action notice is never required for a loan modification that is denied.
- You must notify an applicant of a credit decision within 30 days of receiving a complete application. (correct)
- An adverse action notice must always be given verbally.
- You can consider an application incomplete if you have not yet requested the credit report.
Which scenario does NOT constitute illegal discrimination in lending practices?
Which scenario does NOT constitute illegal discrimination in lending practices?
- A creditor develops a special credit program and special rates for borrowers over age 62.
- A creditor uniformly applies a neutral policy resulting in female borrowers receiving on average 1% higher loan rates than male borrowers.
- A written loan policy provides a 1/2% discount on loans to married couples. (correct)
- A creditor processes applications from African Americans in five days, but processes applications from Whites in three days.
Which statement regarding discrimination in lending is FALSE?
Which statement regarding discrimination in lending is FALSE?
- Overt discrimination means stating or implying a preference on a prohibited basis.
- Making casual remarks or jokes about prohibited basis preferences could be overt discrimination.
- Disparate treatment means treating applicants differently on a prohibited basis.
- Disparate impact can never occur if your policies are neutral and applied without discriminatory intent. (correct)
For which credit outcomes is a lender required to notify applicants?
For which credit outcomes is a lender required to notify applicants?
A lender advertises loans with the tagline 'For young professionals only.' Which type of illegal discrimination does this represent?
A lender advertises loans with the tagline 'For young professionals only.' Which type of illegal discrimination does this represent?
A mortgage company denies loans to applicants in a specific ZIP code due to the area's perceived risk. This practice is best described as:
A mortgage company denies loans to applicants in a specific ZIP code due to the area's perceived risk. This practice is best described as:
What is the primary purpose of the Equal Credit Opportunity Act (ECOA)?
What is the primary purpose of the Equal Credit Opportunity Act (ECOA)?
A lender implements a policy requiring larger down payments from unmarried applicants compared to married applicants. What type of discrimination is this?
A lender implements a policy requiring larger down payments from unmarried applicants compared to married applicants. What type of discrimination is this?
If a lender suspects mortgage fraud on an application, what is their ethical responsibility?
If a lender suspects mortgage fraud on an application, what is their ethical responsibility?
A lender encourages minority applicants to apply for loans in predominantly minority neighborhoods, even if they qualify for loans elsewhere. This practice is known as:
A lender encourages minority applicants to apply for loans in predominantly minority neighborhoods, even if they qualify for loans elsewhere. This practice is known as:
Flashcards
Credit decision notification
Credit decision notification
Notify applicants within 30 days of a credit decision after receiving a complete application.
Neutral policy application
Neutral policy application
Applying a neutral policy uniformly is NOT illegal discrimination.
Disparate impact
Disparate impact
Disparate impact can occur even with neutral policies
Applicant notification
Applicant notification
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Study Notes
- You must notify an applicant of a credit decision within 30 days of receiving a complete application.
- A written loan policy providing a 1/2% discount on loans to married couples is not a form of illegal discrimination
- Disparate impact can never occur if policies are neutral and applied without discriminatory intent.
- A lender must notify applicants of loan approvals, loan denials, and counteroffers.
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