PSI Virginia Real Estate Practice Exam

What is a primary requirement of the Equal Credit Opportunity Act?

1. Credit providers may not discriminate based on race only

2. Credit providers may not discriminate based on age, social security, or housing loans

3. All applicants must provide proof of income

4. Only applicants with frequent credit inquiries might face penalties

The correct answer is: Credit providers may not discriminate based on age, social security, or housing loans

The primary requirement of the Equal Credit Opportunity Act (ECOA) is that credit providers cannot discriminate against applicants based on certain protected characteristics, which include age, social security number, income, and the basis of housing loans. The ECOA is designed to ensure that all individuals have equal access to credit without facing discrimination based on race, color, religion, national origin, sex, marital status, or age, among other factors. By stating that credit providers must not discriminate based on these characteristics, the act aims to foster a fairer lending environment where credit decisions are made based on the applicant's creditworthiness rather than personal attributes or status. This emphasis on inclusivity helps protect consumers and promotes equal opportunities in obtaining credit. The other options provided do not accurately capture the scope of the ECOA's prohibitions or requirements, as they either focus on more limited aspects of credit evaluation or misinterpret regulatory mandates. Understanding the full scope of the ECOA is essential for navigating the landscape of credit and lending practices effectively.