In what situation can a lender legally discriminate based on age?

In the context of lending practices, it is permissible for a lender to discriminate based on age specifically in relation to the legal capacity to enter into contracts. The law generally mandates that individuals must reach the age of majority, which is typically 18 years old in most states, to legally sign contracts such as loan agreements. Therefore, if a borrower is too young to sign a contract, a lender can legally choose not to extend credit based on that age factor.

This is grounded in legal frameworks designed to protect young individuals who may not fully understand the implications of financial agreements. In contrast, using age as a reason for discrimination against older borrowers solely based on their age or assuming their inability to repay a loan is not permitted under fair lending laws. Additionally, considerations of employment status or joint applications do not specifically relate to age discrimination and would not provide a legal ground for age-related lending decisions.