Roles of the ECOA and FHA
Discrimination is present in all facets of life. An individual may experience prejudice based on their race, sex, religion, ethnicity, or age. Evidence of discrimination can occur in employment offices, in judicial proceedings, and even when an individual is applying for credit. Some lenders have been known to discriminate against certain applicants.
Credit discrimination often involves age discrimination, discrimination against women, and racial discrimination. Federal legislation has been developed in order to combat credit discrimination.
The Federal Fair Housing Act was established in 1968 in order to prevent discrimination during the course of a personal real estate purchase. Under the Federal Fair Housing Act, a creditor is prohibited from discriminating against an applicant who is applying for a loan to purchase, repair or maintain a home. It also forbids discrimination at any point during the sale or rent of a home or an apartment.
To boot, the Federal Fair Housing Act seeks to prevent individuals from discriminating against potential buyers when they are attempting to sell or rent a home, making it illegal to refuse to sell a home to a potential buyer based on their race, sex, religion, or other personal characteristics. It also prohibits the creation or distribution of advertisements for homes that blatantly discriminate against a certain group of people.
Though the Federal Fair Housing Act and the Equal Credit Opportunity Act have not abolished credit discrimination outright, they have made considerable progress in addressing the issue in the United States.
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