What legislation does NOT allow a lender to consider family size when qualifying income?

The correct choice indicates that the Equal Credit Opportunity Act (ECOA) does not permit lenders to consider family size when qualifying income for a loan. The ECOA aims to prevent discrimination in lending practices, ensuring that all applicants receive equal treatment regardless of personal characteristics, including family structure. This means that lenders cannot base their decisions on an applicant’s family size, as doing so could lead to discriminatory practices.

In contrast, the other options each have different focuses. The Real Estate Settlement Procedures Act (RESPA) primarily deals with disclosure requirements and prohibits kickbacks in real estate transactions. The Truth in Lending Act (TILA) focuses on ensuring borrowers are provided with clear and accurate information about credit terms and costs, and while it mandates transparency, it does not address family size in the qualification process. The Fair Credit Reporting Act (FCRA) protects the privacy and accuracy of information in credit reports, which, again, does not involve family size in income qualifications.

Understanding the specific purposes of these laws helps clarify why the ECOA distinctly prohibits consideration of family size during the qualification process, emphasizing fair treatment in lending.