Aceable level 7 chapter 4

Marital Status

The definition of "marital status" set out in the ECOA differs in important ways from the definition of "familial status" established by the federal Fair Housing Act. You see, under ECOA, lenders may not deny a loan to an individual merely because that person is divorced, widowed, or unmarried. Whereas the federal Fair Housing Act's familial status protection focuses on the presence of children (dependents under the age of 18), the marital status protection afforded by ECOA aims to prevent discrimination against people without spouses. 👍

Acceptable Questions for lenders to ask

To get a better sense of the types of questions that ARE acceptable, let's check out the following list of rules: A lender may not ask if an applicant is divorced or widowed, but may ask if a borrower is married, unmarried, or separated. The lender may not ask about the receipt of alimony or child support unless the borrower intends to use that money to qualify for the loan, but may ask if a borrower must pay alimony or child support. A lender may not ask about a borrower's birth control or intentions for childbearing. A lender may not ask about a borrower's spouse unless that person will be involved in the contract. A lender may not discount or exclude any income because of the source of that income. A lender must report credit information on married couples separately in the name of each spouse. A lender may not ask about the applicant's race or national origin.

Equal Credit Opportunity Act (ECOA)

he Equal Credit Opportunity Act (ECOA) makes it illegal for a lender to discriminate against borrowers based on their membership in a protected class. Specifically, the Act makes it illegal to: Refuse borrowers credit if they qualify for it Discourage anyone from applying for credit Offer anyone credit on terms that are less favorable (example: higher interest rate) than terms offered to someone with similar qualifications Close their account Protected Classes It is illegal for lenders to discriminate on the basis of: Race or color Religion National origin Sex Marital status Age (as long as they are old enough to enter into a contract) Receipt of income from any public assistance program Exercising in good faith their rights under the Consumer Credit Protection Act