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Real estate glossaryNational exam concept

Equal Credit Opportunity Act (ECOA)

ECOA is the federal law prohibiting creditors from discriminating in any aspect of a credit transaction on protected bases specified by the Act and Regulation B.

Exam area: Financing

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What does “Equal Credit Opportunity Act (ECOA)” mean in real estate?

ECOA is the federal law prohibiting creditors from discriminating in any aspect of a credit transaction on protected bases specified by the Act and Regulation B.

How is “Equal Credit Opportunity Act (ECOA)” different from the closest wrong answer?

ECOA governs credit discrimination. The Fair Housing Act reaches housing discrimination more broadly, including sale, rental, and housing-related services.

What is the Georgia-specific rule?

ECOA applies to covered creditors and applicants in Georgia. A creditor may evaluate legitimate creditworthiness factors but cannot use a prohibited basis as the reason for adverse treatment.

Worked exam example

Scenario

A lender refuses to consider an applicant's income because the applicant receives it from a lawful public-assistance program. That raises ECOA concerns.

What is the most common exam trap?

Trap correction

A lending decision can implicate both ECOA and fair housing law. Do not assume only one statute can apply.

Original exam check

Apply the definition

A loan officer tells an applicant that income from a public-assistance program will not be counted, even though it is lawful, steady, and documented. Which federal law most directly addresses this?

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Related terms to learn next

Fair Housing Act

The federal Fair Housing Act prohibits discrimination in covered housing sales, rentals, advertising, financing, brokerage, and related services because of race, color, religion, sex, familial status, national origin, or disability.

Protected class

A protected class is a group defined by a characteristic that anti-discrimination law prohibits decision-makers from using as a basis for specified housing, credit, employment, or public-accommodation conduct.

Redlining

Redlining is denying, limiting, pricing, or discouraging lending, insurance, brokerage, or other housing-related services because of the racial, ethnic, protected-class, or geographic character of an area rather than legitimate individual risk factors.

Truth in Lending Act (TILA)

TILA is the federal consumer-credit law requiring standardized disclosure of credit costs and terms, including finance charges and annual percentage rate, and governing specified advertising and rescission rights through Regulation Z.

Recommended next complete lesson

Continue with Financing complete lesson. It places this term inside the full rule, worked examples, exam traps, and mixed practice required for mastery.
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