What does the ECOA prohibit lenders from doing?

The Equal Credit Opportunity Act (ECOA) is a federal law that aims to ensure fair treatment and prevent discrimination in lending practices. The correct answer highlights a critical provision of the ECOA: it prohibits lenders from refusing to consider income based on its source. This means that lenders cannot discriminate against applicants based on where their income comes from, such as from public assistance, rental income, or part-time employment. This promotes equality in how individuals are assessed for creditworthiness, allowing more people access to loans regardless of their income sources.

Each of the other options addresses various practices that, while they may seem unfair or discriminatory, are not specifically covered under the ECOA in the same way. For instance, charging higher interest rates might be a result of risk-based pricing based on creditworthiness or other factors, and does not inherently violate ECOA as long as it is applied uniformly to all borrowers. Offering loans with no interest doesn’t directly relate to discrimination and is more of a lending structure or promotional tool. Lastly, restricting loan amounts based on property location may pertain more to lending policy rather than a direct violation of ECOA's mandate to prevent discrimination based on protected classes.

Overall, the ECOA's mission is to ensure that all consumers have equal access