Question

The law providing that a loan applicant who is rejected must be provided with a statement of the reasons for the rejection within 30 days is the

A)Equal Credit Opportunity Act.
B)Fair Credit Reporting Act.
C)Community Reinvestment Act.
D)Real Estate Settlement Procedures Act.

Answer 1

The Equal Credit Opportunity Act mandates the provision of reasons for loan application rejections within 30 days, aiming to prevent discrimination in credit decisions.

Step-by-step explanation:

The law that requires a loan applicant who is rejected to be provided with a statement of the reasons for the rejection within 30 days is the Equal Credit Opportunity Act.

This federal law was enacted to prevent discrimination based on factors such as gender, race, ethnicity, and under certain circumstances, age, in decisions concerning the extension of credit.

It ensured fair lending practices, making it illegal for creditors to deny credit or to discriminate in the lending process, and necessitated the disclosure of the reasons behind credit application rejections.