Which act prohibits discrimination in credit transactions based on protected characteristics?

• A. Fair Housing Act
• B. Community Reinvestment Act
• C. Equal Credit Opportunity Act
• D. Truth in Lending Act

Answer: (C)

Discrimination in credit transactions is addressed by prohibiting bias in lending decisions and terms. The Equal Credit Opportunity Act specifically bans denying or altering credit based on protected characteristics such as race, color, religion, national origin, sex, marital status, age, or dependence on public assistance. This means lenders must evaluate applicants on creditworthiness and repayment ability, not on personal attributes. The other acts focus on different areas: the Fair Housing Act targets discrimination in housing-related activities, Truth in Lending Act requires clear disclosures about loan terms and costs, and the Community Reinvestment Act encourages lenders to serve the credit needs of their communities without directly dictating credit decision criteria.