@049 CHAP 9 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � CONSUMER CREDIT LAWS AND REGULATIONS � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� @Q "A dollar borrowed is a dollar earned." @Q -- Jenkins' Second Law of Business Survival Many of the largest and most successful companies in America have gotten where they are, in part, by providing consumer credit to persons who buy their products. Classic examples would include such giant companies as General Motors and Sears, although large numbers of smaller companies have also found that financing their customers' purchases can be a major boon to sales and that the interest earned on such credit can also become an important profit center in its own right. By consumer credit, we are not referring here to the prac- tice that is common, particularly in service businesses, of allowing a client or customer to "charge it" and pay you at the end of the month, which may or may not make sense in your particular business, and which is largely unregulated by the government. Instead, the following discussion deals with the situation where your business extends credit and charges interest during the period over which the loan amount (or amount financed) is being paid off by the customer. EQUAL CREDIT OPPORTUNITY LAWS If your business is engaged in providing consumer credit, note that you will most likely be subject to the provisions of the federal Equal Credit Opportunity Act (ECOA). In general, ECOA prohibits discrimination in credit transac- tions on the basis of race, color, religion, national ori- gin, sex, age or marital status. The basic principle of this law is that each person applying for credit must be considered as an individual. This means, primarily, that there are very strict limits regarding what you may ask about marital status and about the spouse of the applicant. (You may ask about marital status, but only to determine what rights and remedies you might have as a creditor -- such as in a community property state -- but not to de- termine the creditworthiness of the applicant.) ECOA also forbids discrimination in providing credit be- cause some or all some or all of the applicant's income de- rives from public assistance programs, or because a person exercised a right, in good faith, under the Consumer Credit Protection Act.