The Equal Credit Opportunity Act Makes It Illegal for a Lender

question 32

True/False

The Equal Credit Opportunity Act makes it illegal for a lender to discriminate against a potential borrower because of race,national origin,religion,or sex,but it is permissible to treat a borrower differently if he or she is on welfare.

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Definitions:

Collateral

An asset that a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.

Allowance Method

An accounting technique used to estimate and account for bad debts or uncollectible accounts receivable.

Bad Debts

Accounts receivable that a company considers uncollectible and writes off as a loss in its financial statements.

Sales

The transactions involving the exchange of goods or services for money.