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#1759 - 05/15/01 04:58 AM Fair Lending
Michele Petry Offline
New Poster
Joined: May 2001
Posts: 7
I am looking for some input on different marketing techniques and any associated fair lending risks.

For example, say a lender partners with a company to provide certain "preferred" rates to employees of Company A. However, the rates and terms offered to employees of Company B are not the same, or as good.

Since we do not know the make up of each company according to prohibitied bases, would there be a fair lending risk with the two different loan programs described above? What if Company B ended up having a higher ratio of employees that fell under a prohibited basis in Reg B?


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#1760 - 05/14/01 06:55 PM Re: Fair Lending
Lucy Griffin Offline

Diamond Poster
Lucy Griffin
Joined: Nov 2000
Posts: 1,544
This would indeed be a risk and business purpose defences will only get you a short distance. Before offering different products, you should look at the demographics of the company's employees.

An additional measure of whether a practice is discriminatory is whether the same product and pricing is available through a general channel. If a customer could come in and request the product, then a mailing that could have discriminatory impact could be defended. But, if the only way that a consumer can get the favorable pricing is by being employed at a specific company, then you clearly run a fair lending risk.


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