What does the Equal Credit Opportunity Act (ECOA) prohibit in credit transactions?

The Equal Credit Opportunity Act (ECOA) is designed to promote fairness in lending by prohibiting discrimination against applicants for credit based on certain protected characteristics. The correct answer indicates that ECOA prohibits discrimination based on sex, national origin, and age, among other factors.

This means that lending institutions cannot deny credit or offer unfavorable terms based solely on these characteristics. The legislation aims to ensure that all individuals have equal access to credit, regardless of their gender, background, or age, fostering a more equitable lending environment.

By encompassing various forms of discrimination, ECOA extends protections beyond just one or two characteristics, addressing broader issues of inequality in credit transactions. The option reflects the act's comprehensive approach in combating discrimination in financial lending.