Under the Equal Credit Opportunity Act (ECOA), what is prohibited as a basis for discrimination?

The correct answer is that discrimination based on the creditworthiness of the applicant is prohibited under the Equal Credit Opportunity Act (ECOA). The ECOA is designed to ensure that all consumers have an equal opportunity to obtain credit without discrimination based on specific protected classes such as race, color, religion, national origin, sex, marital status, or age.

Creditworthiness itself reflects a person's ability to repay a loan, and while it is a relevant factor in lending decisions, it must be evaluated without bias against the aforementioned protected characteristics. The legislation aims to prevent practices where loan applicants are treated unfairly based on personal characteristics rather than their financial qualifications.

Income level, marital status, and age are specific factors listed under the ECOA to ensure they do not serve as reasons for denying credit. Therefore, these characteristics cannot be used as a basis for discrimination when making lending decisions, but they can be part of the overall assessment of an individual's creditworthiness. Thus, while elements related to an applicant's financial background are crucial, using creditworthiness as a discriminatory practice would contradict the purpose of the ECOA.