EthicsQuestion 324 of 400
A lender's staff routinely offers subprime products to equally qualified minority applicants while offering prime products to non-minority applicants. This pattern is best described as:
a.Acceptable risk-based pricing
b.Illegal steering / disparate treatment in loan products
c.A privacy violation
d.A RESPA Section 8 kickback
Explanation
Channeling equally qualified minority borrowers into worse (subprime) products based on a protected class is illegal steering and disparate treatment under fair-lending law. It is not legitimate risk-based pricing when the applicants are equally qualified, and it is neither a privacy issue nor a RESPA kickback.
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