What is disparate treatment in fair lending?
Disparate treatment occurs when a lender treats a. credit applicant differently on the basis of one of the. prohibited factors.
What is an example of disparate treatment in lending?
Illegal disparate treatment occurs when a lender bases its lending decision on one or more of the prohibited discriminatory factors covered by the fair lending laws, for example, if a lender offers a credit card with a limit of $750 for applicants age 21 through 30 and $1,500 for applicants over age 30.
Which of the following are fair lending laws?
Two different federal laws deal with discrimination in lending: the Fair Housing Act (FHAct) and the Equal Credit Opportunity Act (ECOA). These fair lending laws prohibit lenders from discriminating in credit transactions on the basis of race, color, national origin, religion, sex, and other specified grounds.
What are the 3 types of lending discrimination?
There are 3 types of discrimination in fair lending:Overt Discrimination. Overt discrimination is the act of openly and/or intentionally discriminating on a prohibited basis, i.e. "we don't lend to single women."Disparate Treatment. ... Disparate Impact.
Which of the following is an example of a fair lending complaint?
For example, if a lender refuses to make a mortgage loan because of your race or ethnicity, or if a lender charges excessive fees to refinance your current mortgage loan based on your race or ethnicity, the lender is in violation of the federal Fair Housing Act.
What is disparate impact or effect?
Disparate impact occurs when policies, practices, rules or other systems that appear to be neutral result in a disproportionate impact on a protected group.
What is comparative disparate treatment?
Comparative evidence of disparate treatment occurs when a protected class applicant is treated less favorably than other applicants and is typically discovered through a comparative analysis during a fair lending examination.
Which of the following are prohibited under the concept of fair lending?
The definition of prohibited basis varies based on the specific regulation, but the possible prohibited bases are: race or color, religion, national origin, gender or sex, marital status, age, receipt of income from public assistance, exercise of rights under the CCPA, handicap, or familial status.
Is disparate treatment illegal?
Disparate treatment is when an employer regards a specific applicant or an employee differently than others, solely because they are a woman, minority, or member of another protected class. Disparate treatment is illegal to ensure employers don't act with discriminatory intent against an applicant or employee.
What does overt disparate treatment mean?
Understanding Overt Evidence of Disparate Treatment This type of discrimination occurs when a lender openly discriminates on a prohibited basis. This means that a lender publicly makes a statement or publishes an advertisement that is a blatant statement of discrimination.
What is disparate impact analysis?
Disparate impact means the selective adverse effect of a facially neutral law, requirement, or process, which lacks any relevant justification, on individuals belonging to a legally protected group. Federal statutes and regulations authorize the use of disparate impact analysis to identify unlawful discrimination.