Which federal act is designed to eliminate discrimination in lending?

The Equal Credit Opportunity Act is designed to eliminate discrimination in lending by ensuring that all consumers have equal access to credit, regardless of their race, color, religion, national origin, sex, marital status, or age. This act mandates that lenders evaluate creditworthiness based on the applicant's ability to repay the loan rather than on personal characteristics that do not indicate credit risk.

The key purpose of this legislation is to promote fair lending practices and prevent discriminatory lending practices. By establishing guidelines that prohibit bias within the credit evaluation process, the Equal Credit Opportunity Act plays a crucial role in fostering a more equitable financial system where all individuals can obtain credit based on merit rather than discriminatory factors.

The other options, while related to aspects of lending and consumer protection, serve different purposes and do not specifically focus on eliminating discrimination in credit decisions. The Home Mortgage Disclosure Act provides information about lending practices in certain communities, the Community Reinvestment Act encourages financial institutions to help meet the credit needs of the communities they serve, and the Truth in Lending Act is aimed at promoting informed use of credit by requiring disclosures about terms and costs.