Banks cannot charge different loan rates for individuals based on what criteria?

The correct answer is that banks cannot charge different loan rates for individuals based on neighborhood location. This principle is rooted in fair lending laws, specifically the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act, which prohibit discrimination in lending based on race, color, religion, sex, national origin, marital status, or age. Charging different rates based on where someone lives could lead to discriminatory practices that disadvantage certain groups or individuals based on their neighborhood, which is considered a protected characteristic under these laws.

This standard promotes equality in lending practices, ensuring that all applicants are treated fairly, regardless of their geographic location. While factors such as credit score, applicant age, and property size may legitimately impact loan rates due to the associated risk and cost factors, using neighborhood location as a criterion would violate anti-discrimination laws.