2020Directory_FNL_FlippingBook

Compliance Obligation

Federal Laws that Apply

Violations / Penalties

Credit Application Continued...

Equal Credit Opportunity Act (ECOA), Regulation B, and FCRA Continued...

• ECOA violations (DOJ): If unable to obtain compliance, the FTC may refer ECOA violations to the U.S. Dept. of Justice (DOJ). The DOJ may pursue a civil action where creditors are engaged in a pattern or practice of violations, and obtain such relief as may be appropriate, including actual and punitive damages and injunctive relief. 15 U.S.C. § 1691e(g)-(h). • ECOA violations (private right of action): Individuals may seek recovery individually or as a class for actual damages. In addition, punitive damages are available but limited to $10,000, but in a class action total recovery must not exceed the lesser of $500,000 or 1% of dealer’s net worth. Equitable and declaratory relief are also available. In addition, costs and reasonable attorney’s fees can be recovered by individuals or a class. 15 U.S.C. § 1691e; 12 C.F.R. § 202.16. • FCRA violations: $3,993 for a knowing violation, which constitutes a pattern or practice of violations. 15 U.S.C. § 1681s(a)(2)(A); 16 C.F.R. § 1.98. Any violation of the FCRA also violates FTC Act § 5, with potential for damages of up to $42,530 per violation if FTC enters into an enforcement decree. 16 C.F.R. § 1.98. • FCRA violations (private right of action): For negligent violations under private action: actual damages and the costs of the action together with reasonable attorney’s fees. 15 U.S.C. § 1681o. For willful violations under private action: actual damages or statutory damages of not less than $100 and not more than $1,000 per violation, punitive damage liability with no cap and costs of the action together with reasonable attorney’s fees. 15 U.S.C. § 1681n.

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219 2020 MEMBERSHIP DIRECTORY & SERVICES GUIDE