Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

Which type of discrimination does the Equal Credit Opportunity Act (ECOA) specifically address?

1. Discrimination based on employment history

2. Discrimination against borrowers

3. Discrimination by real estate agents

4. Discrimination in rental agreements

The correct answer is: Discrimination against borrowers

The Equal Credit Opportunity Act (ECOA) specifically addresses discrimination against borrowers in lending practices. The intention of the ECOA is to ensure that all individuals have equal access to credit, regardless of characteristics such as race, color, religion, national origin, sex, marital status, age, or because they receive income from a public assistance program. This focus on ensuring fair treatment for borrowers is critical, as it directly impacts their ability to secure loans or credit on equitable terms. By prohibiting discriminatory practices in lending, the ECOA helps to foster a more inclusive financial environment where borrowers can obtain loans without facing bias or unfair treatment based on their personal characteristics. The other options focus on different contexts. Employment history relates more to employment discrimination, while real estate agents and rental agreements pertain to other anti-discrimination laws, such as the Fair Housing Act, which addresses issues in housing and tenancy. Thus, the focus of ECOA is specifically on protecting borrowers in credit transactions.