Mortgage Loan Originator (MLO) Licensing Practice Test

Which regulation corresponds to ECOA?

1. Reg Z

2. Reg B

3. Reg C

4. Reg V

The correct answer is: Reg B

The correct regulation corresponding to the Equal Credit Opportunity Act (ECOA) is Regulation B. ECOA was enacted to prohibit discrimination in credit transactions based on race, color, religion, national origin, sex, marital status, age, or because the applicant receives public assistance. Regulation B implements the provisions of ECOA by ensuring that all consumers are treated equally in credit processes. Regulation B lays out the requirements for fair lending practices, helps protect consumers by providing them with information about their rights, and mandates lenders to evaluate credit applications without bias. It establishes guidelines for lenders in areas such as underwriting, advertising, and record-keeping, all aimed at promoting fairness in the lending process. In contrast, Regulation Z pertains to the Truth in Lending Act, ensuring that consumers are informed about credit terms and costs. Regulation C relates to the Home Mortgage Disclosure Act (HMDA), which requires lenders to report certain information about their mortgage lending practices. Regulation V is associated with the Fair Credit Reporting Act, focusing on the regulation of consumer credit information and reporting. Understanding these distinctions is important for recognizing the specific roles that each regulation plays in consumer protection and financial regulation.