Illegal disparate treatment does occur whenever a loan provider bases its financing choice using one or even more for the discriminatory that is prohibited covered by the reasonable financing legislation. As an example, if lender provides a charge card having a limitation of $750 for candidates age 21 through 30 and $1,500 for candidates over age 30. This policy violates the ECOA’s prohibition on discrimination considering age.
Fair lending guidelines additionally have conditions to deal with lending that is predatory. A few examples follow:
- Collateral or equity “stripping”: The training of creating loans that rely on the liquidation worth associated with debtor’s house or other security as opposed to the debtor’s power to repay.