Which act aims to prevent discrimination based on various protected characteristics in lending?

The Equal Credit Opportunity Act (ECOA) is specifically designed to prohibit discrimination in credit transactions based on protected characteristics such as race, color, religion, national origin, sex, marital status, age, or because an applicant receives public assistance. Enacted in 1974, the ECOA ensures that all individuals have equal access to credit and that credit decisions are based solely on the applicant's creditworthiness rather than discriminatory factors.

This act plays a critical role in promoting fairness in lending practices, making it illegal for creditors to discriminate against applicants. It also requires lenders to notify applicants of the action taken on their credit applications and to provide reasons for any denials, thereby fostering transparency and accountability in the lending process.

Other options, while related to consumer rights and financial regulations, focus on different aspects. The Home Mortgage Disclosure Act primarily aims to collect data about mortgage lending patterns to identify discrimination but does not directly prohibit it. The Fair Housing Act addresses discrimination in housing-related transactions but is distinct from lending practices per se. The Fair Credit Reporting Act regulates how credit information is collected and used but is not focused on discrimination in credit issuance.