Equal Credit Opportunity Act
November 2010, Auto Dealer Today - WebXclusive
“The purpose of this regulation is to promote the availability of credit to all creditworthy applicants without regard to race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract); to the fact that all or part of the applicant's income derives from a public assistance program; or to the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The regulation prohibits creditor practices that discriminate on the basis of any of these factors. The regulation also requires creditors to notify applicants of action taken on their applications; to report credit history in the names of both spouses on an account; to retain records of credit applications; to collect information about the applicant's race and other personal characteristics in applications for certain dwelling-related loans; and to provide applicants with copies of appraisal reports used in connection with credit transactions.”
Penalties for non-compliance: “Any creditor that fails to comply with a requirement imposed by the Act or this regulation is subject to civil liability for actual and punitive damages in individual or class actions … Liability for punitive damages can apply only to nongovernmental entities and is limited to $10,000 in individual actions and the lesser of $500,000 or 1 percent of the creditor's net worth in class actions … provides for equitable and declaratory relief and … authorizes the awarding of costs and reasonable attorney's fees.”
Please note: This is not legal advice and dealers should always seek the assistance of qualified legal counsel.
From "19 Laws, Rules and Regulations That Can Cost You More Than Money" in the September 2010 issue of Auto Dealer Monthly.