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07-14-2014, 09:22 AM #1
ECOA and Regulation B
There's a new article up by law firm Hudson Cook LLP that claims if you offer business loans, you have to comply with the Equal Credit Opportunity Act and Regulation B.
http://dailyfunder.com/magazine/addi...egal-concerns/
Commercial transactions are included.
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07-14-2014, 10:18 AM #2
"The primary purpose of the ECOA is to prohibit a lender from discriminating on a prohibited basis, including: race, color, religion, national origin, sex, marital status or age (provided the applicant has the capacity to enter into a legally binding contract); because part or all of an applicant’s income derives from a public assistance program; or because the applicant previously exercised in good faith any right under the Consumer Credit Protection Act, which includes the ECOA."
So this would apply to funders out there who refuse a certain ethnic group, I get it....but could this be stretched into SIC code scrutiny?
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07-14-2014, 10:22 AM #3
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07-14-2014, 11:11 AM #4
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07-14-2014, 07:06 PM #5
- Join Date
- Apr 2014
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- New York
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- 271
ECOA and Regulation B
on deck does this on thier declines
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07-14-2014, 07:42 PM #6
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07-15-2014, 08:18 AM #7
There is a lot more to this, but a few quick points.
Obviously this is about discrimination.
There are three test that are run for proof of lending discrimination.
- Overt evidence of discrimination
- evidence of disparate treatment
- evidence of disparate impact
Lenders need an adverse action policy - among other policies and they need to keep adverse action notices for 25 months
* I am not a lawyer and this is not legal advice, just an opinion *
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09-04-2014, 09:02 AM #8
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- Aug 2014
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- 21
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09-04-2014, 09:04 AM #9
- Join Date
- Aug 2014
- Posts
- 21
Do lenders need to send notice if they approve the loan but fund less than requested amount? Anyone know what the major players do?
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01-24-2015, 11:16 PM #10
- Join Date
- Jan 2015
- Location
- San Jose, California
- Posts
- 30
In the pass few months a lot of businesses are looking for funding but did not have a real business just a corp. If you are a real business and need funding we can help must have four trade lines on your business credit report, and each trade line must be a high credit limit of $10K plus.
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01-26-2015, 04:16 PM #11
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