CRCM Fair Lending and Equal Credit Opportunity

Question 1

The Equal Credit Opportunity Act (ECOA) prohibits discrimination in credit transactions based on which of the following?

Accepted Answer

Race, color, religion, national origin, sex, marital status, or age

Answer

ECOA prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age, and receipt of public assistance.

Question 2

Under ECOA, how many days does a creditor have to notify an applicant of action taken on a completed credit application?

Accepted Answer

30 days

Answer

Creditors must notify applicants of credit decisions within 30 days of receiving a completed application.

Question 3

What is 'redlining' in fair lending?

Accepted Answer

Refusing to lend or imposing unfavorable terms in minority neighborhoods

Answer

Redlining is the illegal practice of denying credit or imposing worse terms based on the racial or ethnic composition of a neighborhood.

Question 4

Which federal law specifically prohibits discrimination in residential mortgage lending based on race or national origin?

Accepted Answer

Fair Housing Act

Answer

The Fair Housing Act prohibits discrimination in residential real estate transactions, including mortgage lending, based on protected characteristics.

Question 5

'Disparate impact' in fair lending refers to:

Accepted Answer

A neutral lending policy that disproportionately harms a protected class

Answer

Disparate impact occurs when a facially neutral policy has a disproportionate adverse effect on a protected class without business justification.

CRCM - Certified Regulatory Compliance Manager Practice Test

CRCM - Certified Regulatory Compliance Manager Practice Test

CRCM Fair Lending and Equal Credit Opportunity