In which situation would a lender's action be classified as a violation of ECOA?

The correct choice highlights a scenario where a lender discriminates against applicants based on gender, which is explicitly prohibited under the Equal Credit Opportunity Act (ECOA). The ECOA is designed to ensure that all consumers have fair access to credit without regard to race, color, religion, national origin, sex, marital status, age, or because they receive public assistance. This law aims to eliminate discrimination in any aspect of the lending process.

In this context, discrimination based on gender constitutes a direct violation of the ECOA, as it denies individuals equal treatment in accessing credit, thereby undermining the intent of the legislation to provide equitable lending practices.

Although denying a loan based on credit score, refusing an application based on income source, and relying solely on credit history are practices that may raise questions in certain circumstances, they do not automatically constitute violations of ECOA. For example, credit scores are a common metric used in lending decisions, and income sources, while they may be scrutinized, can also be legitimate factors assessed in the context of loan eligibility. Thus, these actions may be justifiable based on sound lending practices if they align with the lender’s policies and the borrower's creditworthiness.