Final answer:
The FDIC ensures that lenders adhere to the Equal Credit Opportunity Act (ECOA), which prohibits discrimination based on age, race, sex, or marital status in credit transactions. Banks are also mandated to disclose loan distribution data. The FDIC provides deposit insurance and evaluates bank risks to promote financial stability.
Step-by-step explanation:
If the Federal Deposit Insurance Corporation (FDIC) has reason to believe that a lender has engaged in a pattern or practice of discrimination in violation of the Equal Credit Opportunity Act (ECOA), they are likely to take action to ensure compliance. The ECOA prohibits discrimination on the basis of age, race, sex, or marital status in the credit market. Additionally, banks must disclose publicly information about the distribution of house purchase loans, including geographical distribution and the sex and race of loan applicants, to comply with consumer protection laws and for the purpose of government monitoring.
The Federal Reserve (the Fed) plays a role in ensuring that these consumer protection laws are followed by banks. The FDIC also evaluates bank balance sheets during examinations and provides deposit insurance to safeguard depositors up to $250,000 per account, thereby contributing to financial stability and preventing bank runs. This framework aims to maintain fair lending practices and equal opportunity in accessing credit.