Question

The loan officer knows that the applicants source of income is public assistance, so he tells the applicant not to waster his time filling out an application and paying any fees. What federal law has the loan officer violated?

Answer 1

The loan officer violated the Equal Credit Opportunity Act by discriminating against the applicant based on their source of income, which is public assistance.

Step-by-step explanation:

The federal law that the loan officer violated in this situation is the Equal Credit Opportunity Act (ECOA). This law prohibits creditors from using factors such as gender, race, ethnicity, and age in making decisions regarding the extension of credit. It specifically prevents lenders from discriminating against individuals based on their source of income, including public assistance.

By telling the applicant not to waste their time filling out an application and paying any fees because their source of income is public assistance, the loan officer has engaged in discriminatory lending practices that are prohibited by the ECOA.

If the applicant believes they have been a victim of discrimination, they can file a complaint with the appropriate regulatory agency, such as the Consumer Financial Protection Bureau (CFPB) or the Federal Trade Commission (FTC).