Future Business Leaders of America (FBLA) Business Law Practice Exam

Which landmark act aims to eliminate credit discrimination?

1. Fair Labor Standards Act

2. Equal Pay Act

3. Equal Credit Opportunity Act (ECOA)

4. Civil Rights Act

The correct answer is: Equal Credit Opportunity Act (ECOA)

The Equal Credit Opportunity Act (ECOA) is the correct choice because it specifically targets discrimination in lending practices. Enacted in 1974, ECOA makes it illegal for creditors to discriminate against borrowers based on race, color, religion, national origin, sex, marital status, or age, as well as the receipt of public assistance. This act is vital because it ensures that all individuals have equal access to credit, which is essential for personal and business financial growth. Understanding the context of this act is crucial. Other acts listed focus on different aspects of equality and rights. For instance, the Fair Labor Standards Act pertains mainly to wage and hour laws, ensuring minimum wage and overtime pay standards. The Equal Pay Act focuses specifically on wage discrimination based on gender, and the Civil Rights Act addresses broader civil rights issues, prohibiting discrimination in various areas including employment and public accommodations. However, none of these specifically target the issue of credit discrimination in lending practices like the ECOA does. Thus, ECOA stands out as the landmark act dedicated to eliminating credit discrimination.