ECOA

Question 1

What are the protected classes on ECOA?

Answer 1

Age, Race, Color, Sex, National Origin, Marital Status, and Religion

Question 2

True or False:

A lender may factor receipt of public assistance into is credit decision for a mortgage application.

Answer 2

FALSE

Question 3

When creditors refuse to make loans in certain neighborhoods due to the personal characteristics of the residents

Answer 3

Redlining (i.e. White Neighborhoods and Black Neighborhoods)

Question 4

When predatory lenders target neighborhoods with elderly, immigrant, and minority populations to make risky loans that included oppressive lending terms.

Answer 4

Reverse Redlining

Question 5

Collection of ECOA’s requirements are referred to as:

Answer 5

Regulation B

Question 6

The primary agency responsible for enforcing Reg B

Answer 6

ECOA

Question 7

True or False:

Unlike RESPA and TILA, ECOA applies to loans for business, commercial, and agricultural use

Answer 7

TRUE

Question 8

A creditor’s refusal to offer credit in the amount or according to the terms requested by a loan applicant

Answer 8

Adverse Action

Question 9

ECOA defines “elderly” as

Answer 9

62 years or older

Question 10

Utilizing a factor, value, or weight that is less favorable to elderly applicants than warranted by the creditor’s experience, or that is less favorable than the factor, value, or weight assigned to people who are non-elderly and are most favored by a creditor on the basis of age.

Answer 10

Negative Factor or Value

Question 11

When must notice of adverse action be supplied to the applicant?

Answer 11

Within 30 days of rendering a decision

Question 12

What additional information must be provided with a notice of adverse action?

Answer 12

Statement that ECOA prohibits discrimination

Name and address of creditor

Name of agency that enforces compliance (CFPB)

Indication of whether decision was based on credit report

Information on the credit reporting agency

Question 13

This notice must state the information needed, set a reasonable time for submission of the information, and advise the applicant that failure to provide the information will result in no further consideration of the application

Answer 13

Notice of Incompleteness

Question 14

What valuation disclosures must be provided to an applicant under Reg B?

Answer 14

1. Notice of right to receive copy of appraisal (3 business days after application)
2. A copy of all appraisals (Promptly after appraisal or at least 3 days prior to consummation)

Question 15

True or False:

Declined and withdrawn applications still require a copy of the appraisal

Answer 15

TRUE; however the deadline is extended to 30 days upon action

Question 16

What is the retention requirement for notice of action taken or incompleteness?

Answer 16

25 months

Question 17

When a creditor adopts a neutral policy without discriminatory intent, and the policy has a discriminatory impact

e.g. Limiting transaction to home value of $250k or more may exclude certain protected classes

Answer 17

Disparate Impact

Question 18

True or False:

It is illegal to ask an applicant about his/her national origin if it is not related to collecting information for monitoring under HMDA

Answer 18

TRUE

Question 19

True or False:

Creditors are prohibited from requiring the signature of an applicant’s spouse, or of another person who is not a joint applicant, if the individual qualifies on his or her own for credit

Answer 19

TRUE

Question 20

True or False:

Submission of a joint financial statement or other evidence of jointly-held assets may be considered an application for joint credit.

Answer 20

FALSE

Question 21

Community Property States may require

Answer 21

Cosigning of spouse

Question 22

Reg B Punitive Damages are

Answer 22

$10k for individual actions

The lesser of $500,000 or 1% of a creditor’s net worth in class actions

Question 23

Statute of Limitations for ECOA violations

Answer 23

Five Years