In Processing and evaluating applications""12 CFR 202.6, protected income part is also under discussion. Which of the following considerations is NOT its part?
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A. B. C. D.D
The question pertains to the "protected income" provision under Regulation B, which is part of the Equal Credit Opportunity Act (ECOA) and implemented by the Consumer Financial Protection Bureau (CFPB). The ECOA prohibits discrimination in any aspect of a credit transaction on the basis of certain protected characteristics, such as race, color, religion, national origin, sex, marital status, age, and the receipt of public assistance.
Under 12 CFR 202.6, creditors are required to consider an applicant's "protected income" when evaluating creditworthiness. "Protected income" refers to income derived from public assistance programs, such as Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), and other similar programs. The purpose of the protected income provision is to prevent discrimination against individuals who rely on public assistance programs to meet their basic needs.
Option A states that public assistance income may not be considered at all. This is incorrect because the regulation specifically requires that protected income be considered as part of an applicant's overall creditworthiness. Therefore, option A is not the correct answer.
Option B states that public assistance income may be considered as it relates to another pertinent element of creditworthiness. This is a correct statement. For example, if an applicant receives public assistance income as a result of a disability, the creditor may consider the applicant's medical history as part of the credit evaluation process.
Option C states that creditors may consider the length of time the applicant will receive public assistance income, whether the applicant will continue to qualify for the income, and whether the income can be garnished. This is also a correct statement. Creditors may consider the stability and predictability of the applicant's income stream, including any public assistance income, when evaluating creditworthiness.
Option D states that the following types of income can be discounted or refused for credit evaluation purposes: part-time income, annuities, pensions, retirement benefits, and alimony/child support payments to the extent that they are likely to be consistently made. This is also a correct statement, but it is not part of the protected income provision. Instead, this provision relates to the creditor's ability to evaluate an applicant's income from all sources, not just public assistance income.
Therefore, the correct answer is option A, which is not a part of the protected income provision.