A subprime or predatory loan a. Is now prohibited under Dodd-Frank b. Is a loan with higher interest rates and large prepayment penalties c. Is not covered under the ECOA d. Both Is a loan with higher interest rates and large prepayment penalties and Is not covered

The correct answer is letter "B": Is a loan with higher interest rates and large prepayment penalties.

Explanation:

Subprime or predatory loans are those with higher interest rates usually provided to individuals with negative credit reports. The likelihood that the borrowers will default the payments pushes subprime lenders to increase the interest rates.  

They are named subprime because the interest rate they provide is higher than the U.S. prime rate set by the Federal Open Market Committee of the Federal Reserve Bank. The current prime rate in the U.S. is 5.25%.

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