What action is prohibited by credit unions based on a protected classification?

The action that is prohibited by credit unions based on a protected classification is failing to provide different information or services in lending. Equal treatment and non-discrimination are foundational principles in lending practices, particularly for credit unions that fall under regulations such as the Equal Credit Opportunity Act (ECOA). This law ensures that consumers receive fair access to credit, regardless of their race, color, religion, national origin, sex, marital status, age, or because they receive public assistance.

When a credit union fails to provide consistent information or services across similar situations, it may inadvertently discriminate against individuals based on these protected classifications. This means that all borrowers should receive the same information, services, and opportunities to apply for loans without bias or unequal treatment.

The other options involve situations that are generally aligned with lawful lending practices. For example, adjusting interest rates based on market conditions is a typical practice aimed at maintaining competitiveness and managing risk. Offering loans that are exclusive to specific groups can occur legally when they serve legitimate business purposes rather than discriminatory aims. Similarly, providing loans without collateral is a lending strategy that can be part of a credit union’s broader financial offerings, as long as it complies with sound lending standards and does not discriminate based on the protected classifications.