What is prohibited under ECOA and Regulation B?

Asked by: Prof. Odell Schaden  |  Last update: December 25, 2025
Score: 4.7/5 (32 votes)

The Equal Credit Opportunity Act (ECOA) and its implementing regulations, referred to as Regulation B, ensure that creditors do not discriminate against any applicant on the basis of race, color, religion, national origin, sex, marital status, or age.

What does ECOA Reg B prohibit?

Regulation B prohibits creditors from requesting and collecting specific personal information about an applicant that has no bearing on the applicant's ability or willingness to repay the credit requested and could be used to discriminate against the applicant.

What is ECOA prohibited list?

This Act (Title VII of the Consumer Credit Protection Act) prohibits discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good faith exercise of any rights under the Consumer Credit Protection Act.

Which activities are prohibited under ECOA?

  • Discriminatory Credit Practices Defined. ECOA prohibits discrimination in any aspect of a credit transaction. ...
  • Applicant Marital Status. ...
  • Applicant Age. ...
  • Income Consideration. ...
  • Redlining. ...
  • Indirect Lending.

Which of the following is not permitted under reg b?

Regulation B protects consumers and prohibits lenders from discriminating based on age, gender, ethnicity, nationality, or marital status. Reg B mandates that lenders provide explanations to rejected applicants within 30 days of receiving their completed applications.

What is ECOA?

16 related questions found

What is not a prohibited basis under Regulation B?

A creditor's consideration or application of state property laws directly or indirectly affecting creditworthiness does not constitute unlawful discrimination for the purposes of the ECOA or Regulation B.

Which of the following is not covered by reg e?

These transactions do not fall under the Reg E umbrella: Fund transfers initiated by check or similar paper instruments. Wire transfers. Credit card transactions.

What questions are prohibited by ECOA?

We recommend that you avoid asking applicants about personal characteristics that are protected by law, such as race, color, religion, sex, national origin or age.

What is an example of an ECOA violation?

Imposing unfair terms or conditions on a loan (such as lower loan amount or higher interest rates) based on personal characteristics protected under the ECOA. Asking detailed personal information regarding marital status, such as whether you are widowed or divorced.

What are some of the prohibited factors covered under ECOA FHAct?

  • race or color.
  • national origin.
  • religion.
  • sex.
  • marital status.
  • age.*
  • applicant's receipt of income from a public assistance program.
  • applicant's exercise, in good faith, of any right under the Consumer Credit Protection Act.

What does ECOA not discriminate against?

prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, because an applicant receives income from a public assistance program, or because an applicant has in good faith exercised any right under the Consumer Credit Protection ...

Which of the following is considered discriminatory under ECOA Regulation B?

The Equal Credit Opportunity Act (ECOA) and its implementing regulations, referred to as Regulation B, ensure that creditors do not discriminate against any applicant on the basis of race, color, religion, national origin, sex, marital status, or age.

Which activities are prohibited under ECOA quizlet?

ECOA prohibits discrimination by lenders in any part of a credit transaction on the basis of: race, color, religion, national origin, sex, marital status, age (has to be 18), the receipt of income from a public assistance program, or having exercised any rights under Consumer Credit Protection Act.

What does ECOA code B mean?

A: Authorized user - A joint account where the borrower is an authorized user, but has no contractual responsibility. I: Individual account - An account solely for this borrower. B: Borrower's account - An account solely for the borrower.

What is the prohibited basis in fair lending?

What is fair lending? Fair lending prohibits lenders from considering your race, color, national origin, religion, sex, familial status, or disability when applying for residential mortgage loans.

What is adverse action under Regulation B?

Adverse action notices under the ECOA and Regulation B are designed to help consumers and businesses by providing transparency to the credit underwriting process and protecting against potential credit discrimination by requiring creditors to explain the reasons adverse action was taken.

What are the prohibited practices of ECOA?

The FHAct prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing ...

What is the most common Reg B violation?

We recommend that every financial institution take a couple minutes to review the "most frequently cited Regulation B violations" in order to compare their existing Fair Lending compliance management system: Common Violation #1: Discrimination on a prohibited basis in a credit transaction.

What is an example of a violation of the Fair credit Reporting Act?

When your credit circumstances have changed, and the information in your credit report isn't updated to reflect these changes, this failure might be an FCRA violation. Some examples of this kind of FCRA violation include: failing to report that a debt was discharged in bankruptcy. reporting old debts as new or re-aged.

What is permissible under the ECOA and Regulation B?

The ECOA and its implementing Regulation B not only prohibit discrimination in credit transactions, but also set forth additional requirements, such as requiring adverse action notices in appropriate circumstances.

What questions are illegal to ask at EEOC interview?

Therefore, inquiries about organizations, clubs, societies, and lodges of which an applicant may be a member or any other questions, which may indicate the applicant's race, sex, national origin, disability status, age, religion, color or ancestry if answered, should generally be avoided.

What are two questions you should avoid asking based on ECOA?

Your marital status cannot be used against you when evaluating your credit application. Any questions about your race, ethnicity and gender cannot be used as a reason to approve or deny your credit application.

What does Reg E not apply to?

» Think of Regulation E as applying to financial transactions with money that consumers really had. Reg E does not apply when transactions involve borrowed funds.

Which of the following is usually excluded under errors and omissions insurance?

Like most insurance policies, a typical E&O policy for insurance agents excludes dishonest, criminal, fraudulent, or malicious actions. While this exclusion is routine in most insurance policies, agents should be aware of it.

Which of the following is not a regulatory?

CIBIL is not a regulatory institutions in Indian financial system.