1
Q
- ECOA stands for the ____________
A
Equal Credit Opportunity Act (ECOA).
2
Q
- Who enforces ECOA?
A
The Consumer Financial Protection Bureau (CFPB)
3
Q
What regulation is ECOA?
A
Regulation B- It requires that creditors do not discriminate when granting credit - they must “Be Equal”
4
Q
- ECOA primarily deals with a “________”.
A
credit application
5
Q
- The Equal Credit Opportunity Act (ECOA) prohibits _________ by lenders in any part of a __________ based on race, color, religion, national origin, sex, marital status, age (provided the applicant has attained the minimum legal age in the state), the receipt of income from a public assistance program, or having exercised any rights under the Consumer Credit Protection Act.
A
discrimination, credit transaction
6
Q
ECOA protected classes include:
A
SCORR MAP
Sex. Color, Origin National, Race, Religion, Marital Status, Age, Public Assistance
7
Q
- ECOA (Regulation B) also specifies that the borrower is entitled to a copy of the residential property _______ at least _________ days before closing (loan consummation).
A
appraisal report, 3 business
8
Q
- Copies of Appraisals - upon receipt of an application, lenders have _______ days to notify a borrower of their right to receive a copy of any _________ or ___________.
A
three, appraisal or valuation.
9
Q
- Requires credit bureaus to maintain _________________ for married spouses, if requested.
A
separate credit files
10
Q
- ECOA Allows credit applicants to ________________ or bring a ________ for alleged discrimination.
A
file discrimination complaints, civil lawsuit
11
Q
- ECOA prohibits a creditor from inquiring about a consumer’s ________ or intentions related to having or ______.
A
marital status , raising children
12
Q
- ECOA also prohibits creditors from making any oral or written statement, in advertising or otherwise, to applicants or prospective applicants that would discourage them from ________________ on a prohibited basis, such as membership in a protected class.
A
making or pursuing an application
13
Q
ECOA has eight protected classes: Sex, Race, Religion, Color, National Origin, Age, Marital Status, and Public Assistance. Which of the 9 are ONLY projected by ECOA?
A
Marital Status, Age, and Public Assistance
14
Q
- ECOA prohibits creditors from refusing to consider or discounting income from __________, __________, _________ if borrower chooses to disclose it.
A
alimony, child support, maintenance
15
Q
- It is because of ECOA that lenders cannot ask if a borrower is single, widowed or divorced. They can only ask if the person is ________, _________, or ___________ and these are the only choices on the loan application.
A
married, unmarried or separated
16
Q
- It is permissible to ask a client about marital status, since this likely impacts the loan and/or documents needed at closing; however, if an applicant is NOT legally married, it is NOT permissible to ask if he/she is _________.
A
single, divorced, widowed, etc.
17
Q
- A loan originator should not ask an applicant how many children they have (or plan to have) – the proper way to obtain this information is “How many ________ do you have?”
A
dependents
18
Q
- According to ECOA, a creditor also may not ask an applicant if any income stated on the application is derived from ___________________, unless the applicant wishes that income to be considered in determining eligibility for the loan.
A
alimony or child support
19
Q
- ECOA dictates the collection of demographic information to monitor the lenders’ compliance with the law. Specifically, on the bottom of the third page of the 1003 loan application, the interviewer MUST specify the applicant’s race, ethnicity, and sex when the loan application is taken _________
A
face-to-face.
20
Q
- ECOA requires credit bureaus to keep separate files on __________, if requested.
A
married spouses
21
Q
- ECOA notification of adverse action (denial letter) must be in ________; a telephone call is not sufficient
A
writing
22
Q
- ECOA states that a creditor must provide an answer on a credit application _________ after receipt of an application. The answer could result in approval, adverse actions (denial) or request for additional information.
A
30 days
23
Q
- ECOA states that a creditor must notify the applicant of action taken on an application within _____ after notifying the applicant of a counteroffer if the applicant does not expressly accept the offer.
A
90 days
24
Q
- The notice of adverse action must contain a what information?
A
statement of the action taken, contact information for the lender, the name and address of the federal agency with jurisdiction, and the reasons for the decision or a statement advising the borrower of their right to receive the reasons.
25
199. An applicant can request a statement of reasons within 60 days of receiving the original adverse action notice. When adverse action is taken - an application has been denied, the applicant was offered less favorable terms than those applied for, or there was a change in terms of an existing credit agreement - the creditor must either
provide notice of the specific reasons for the decision or inform the applicant of his ________ specific reasons for the decision within ____ days.
right to request, 60 days.
26
200. ECOA prevents creditors from discriminating against a borrower’s _________ of income; however, the creditor can discriminate against their ________ of income
SOURCE , AMOUNT
27
201. In order to make sure that the Loan Originator is not violating ECOA, he/she should refrain from asking questions that may be construed as discriminatory; for example, a loan originator should never ask a borrower whether any portion of his income is derived from _____________, __________, or _____________.
alimony, child support, or public assistance.
28
202. If an application for credit is DENIED based on the Appraisal- under ECOA (Reg B) says borrower has how many days to request and the lender has how many days to deliver?
90 days to request a copy/Lender has 30 days deliver.
29
203. ECOA prohibits a lender from discouraging individuals from applying for a mortgage or reject their application because of their _________________________________________________________?
race, color, religion, national origin, sex, marital status, age, or because they receive public assistance.
30
204. Childbearing, childrearing - About plans for having children, childbearing capabilities, or birth control practices. ECOA states that lender/MLOs are not allowed to ask borrowers questions related to how many children they are planning on having in their family. A creditor shall not inquire about birth control practices, intentions concerning the bearing or rearing of children, or the capability to bear children. A creditor may inquire about the ________________________________________________ or expenditures, provided such information is requested without regard to sex, marital status, or any other prohibited basis.
number and ages of an applicant's dependents or about dependent-related financial obligations
31
205: Discrimination that is explicit or obvious is what kind of discrimination?
Overt Dissemination
32
206. What is discrimination that is defined by differences in the way a member of a protected class (race, religion, sex, etc.) are served by an institution. For example, an individual may be engaging in this type of discrimination by shaking the hand of members of one race or gender and not following the same procedure with members of another race or gender. This type of discrimination can also occur if members of a protected class are charged higher rates and/or fees than similarly situated members of a non-protected class
Disparate Treatment
33
207. A method of identifying discrimination through statistical analysis. It occurs when a practice or policy that appears to be non-discriminatory on its face has a disproportionately negative effect on members of a particular race, gender or other protected class. Unlike other forms of discrimination, discrimination identified via disparate impact is often illegal even if the discrimination is unintentional. For example, one of the largest fair-lending settlements based on disparate impact theory alleged that a creditor’s minimum credit score policies resulted in a disproportionate number of minority applicants receiving FHA loans instead of less expensive conventional loans.
Disparate Impact
34
208. HMDA/ECOA – Government Monitoring Information Section (Section 8) of the 1003 requirements – (Demographic Information) HMDA requires that this section be completed to comply with the government monitoring requirements. What is this section used for and what should the applicant be informed that this information is used for?
The applicant should be informed that this information is only used to assure that the lender is not discriminating against applicants and is not considered when determining whether to grant a loan. Under ECOA – if the application is taken face-to-face, this section should be completed based on “visual observation” or “surname”.
35
209. Creditors may not issue revisions to a Loan Estimate due to ______, _________, __________ — whether the creditor is making the disclosure, or a mortgage broker is making a disclosure on the creditor’s behalf.
technical errors, miscalculations, or underestimations of charges
36
210. The Loan Estimates must be given to the borrower no later than ____ business days before consummation or placed in mail no later than ____ business days after the creditor receives information sufficient to justify a revision. This is to ensure that seven business days must pass between delivering or mailing the Loan Estimate (or revised Loan Estimate) before the loan may close. Three (3) days + Four (4) days = Seven (7) days.
four, three,
37
211. ECOA records must be kept for how many months?
25 months.
38
212. A consumer can sue for a violation of ECOA for up to how many months?
24 months. (2 years)
39
213. The penalty for violating ECOA is __________.
$10,000.
Study MLO
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