Can a loan be denied per ECOA because no one likes the purpose for which the money is being borrowed? I feel as long as the purpose does not identify/encroach upon one of the prohibitive bases, that it would be in compliance with regulations. And, that we have not loaned money for this purpose before.

Reason for adverse action would be sufficiently specific if stated, "We do not lend money for the purpose given as the reason for the loan.", would it not?

Personally, I feel we should stick to the creditworthiness of the customer and security offered, but I still need a clarification on the above.

Thank you in advance for needed advice.

Yes, you can prohibit certain types of loans, however you should be careful that you are not making "exceptions" to your rules.

I have to ask: What is the purpose of the loan?

Purpose? I did not ask because I want to leave it 'general' in nature. There's always more than one purpose out there and I do not want to be questioned, i.e., Well, what about this purpose? What about that purpose?

Thanks for advice re: our rules.

You'd better get a clear statement of purpose if you plan to use that as the one and only reason for AA. Likewise, your policy needs to be crystal clear and enforceable. "Knowing it when you see it" may be OK if you're the Supreme Court, but everyone else better have documentation out the...(well, you know what I mean.)

Yes, I do !! And thank you very much for the additional input.