Which act prohibits redlining?

• A. Civil Rights Act
• B. Equal Credit Opportunity Act
• C. Home Mortgage Disclosure Act of 1976
• D. Fair Housing Act

Answer: (C)

This question centers on how mortgage lending is monitored to prevent discriminatory practices like redlining. Redlining means denying or limiting financial services in certain neighborhoods based on race or other demographics. The Home Mortgage Disclosure Act requires lenders to report detailed data on mortgage applications and loans, including where the loans are located. This transparency makes it possible for regulators and researchers to spot patterns of denial or high-cost lending in particular areas, which can indicate redlining and trigger enforcement or corrective action. The other laws address discrimination in lending or housing more directly, but HMDA provides the data framework that reveals where redlining is occurring and supports the measures used to curb it.