ECOA (Equal Credit Opportunity Act)

Question 1

What does ECOA stand for, what is its regulation, and what is its purpose?

Answer 1

Equal Credit Opportunity Act; Regulation B (Or “Be Equal”); and its purpose is to make sure the creditors are being equal when extending credit. No discrimination.

Question 2

ECOA purpose?

Answer 2

Deals with discrimination when granting credit; gives everyone an equal chance to obtain credit.

Question 3

(ECOA) How long does a creditor have to notify an applicant of their lending decision to extend or deny credit?

Answer 3

30 days of the filing of a complete application.

Question 4

(ECOA) If a creditor denies an application of credit, they must provide which disclosure?

Answer 4

Adverse Action Notice.

Question 5

(ECOA) What is a protected class?

Answer 5

A “class of individuals” that can not be used as a source of discrimination/denial when approving a credit application.

Question 6

(ECOA) What are the 8 protected classes of ECOA?

Answer 6

1. ) Sex
2. ) Race
3. ) Religion
4. ) Color
5. ) National Origin
6. ) Age
7. ) Marital Status
8. ) Public Assistance

Question 7

(ECOA & FHA) Which Protected Classes are under the FHA & ECOA; and which Protect Classes are only under ECOA?

Answer 7

ECOA & FHA:

1. ) Sex
2. ) Race
3. ) Religion
4. ) Color
5. ) National Origin

ECOA Only:

6. ) Age
7. ) Marital Status
8. ) Public Assistance

Question 8

Under ECOA, a consumer can be denied because of their source of income, and the amount of income—true or false?

Answer 8

False; a creditor can not deny a consumer because of their source of income, but in relation to their income, but by the amount they make.

Question 9

Under ECOA, what is the correct way to ask about marital status?

Answer 9

“Are you married, unmarried (which refers to single, divorced, widowed) or separated?”

Question 10

Under ECOA, what may the MLO ask concerning plans for childbearing, birth control, or having more kids in the future?

Answer 10

Nothing. The MLO does not have permission to ask anything concerning the consumer planning to have more kids or not.

Question 11

Under ECOA, what are two instances in which the MLO can consider the age of an applicant?

Answer 11

1. ) If the applicant is under 18 years of age.

2. ) The applicant is at least 62 years of age and applying for a reverse mortgage.

Question 12

How long must ECOA disclosures must be retained?

Answer 12

25 months.

Question 13

Under ECOA, a consumer has how long to take civil action if they believe their rights have been violated?

Answer 13

24 months (2 years).

Question 14

What is the penalty for violating ECOA?

Answer 14

$10,000.

Question 15

Under ECOA, if an application for credit is denied based on an appraisal, how long does the consumer have the right to request appraisal report; and how long does the lender have to provide it?

Answer 15

1. ) 90 days.

2. ) 30 days.

Question 16

Under ECOA, if an application was approved, the consumer should receive the appraisal within how many business days prior to the close of a first lien loan?

Answer 16

3 business days.