What information must be provided in writing to a borrower who has been denied a loan under ECOA?

What information must be provided in writing to a borrower who has been denied a loan under ECOA?

• A. Name and address of the lender and federal agencies ensuring compliance
• B. Reason for denial and suggestions for improvement
• C. Credit score and loan history
• D. List of alternative lenders and their rates

Answer: (A)

Under the Equal Credit Opportunity Act (ECOA), when a borrower is denied a loan, they must receive written notification that includes specific information. The requirement to provide the name and address of the lender, as well as federal agencies that oversee compliance, helps ensure transparency in the lending process. It informs the borrower where they can go for further assistance or to file a complaint if they feel their rights have been violated. This notification is meant to ensure that borrowers understand their rights and have access to the necessary resources to address their situation. Providing detailed reasons for denial or suggestions for improvement, while helpful, is not a mandated requirement under ECOA. Rather, it focuses on ensuring the borrower knows who to contact regarding their application and how to seek redress.

Under the Equal Credit Opportunity Act (ECOA), when a borrower is denied a loan, they must receive written notification that includes specific information. The requirement to provide the name and address of the lender, as well as federal agencies that oversee compliance, helps ensure transparency in the lending process. It informs the borrower where they can go for further assistance or to file a complaint if they feel their rights have been violated.

This notification is meant to ensure that borrowers understand their rights and have access to the necessary resources to address their situation. Providing detailed reasons for denial or suggestions for improvement, while helpful, is not a mandated requirement under ECOA. Rather, it focuses on ensuring the borrower knows who to contact regarding their application and how to seek redress.