Posted By: MikeD
Mandatory Allotment - 12/13/07 07:58 PM
Indirect lending, purchasing auto contracts from car dealers. Anyone know if such a lender can agree to purchase service member deals, under the condition that the service member start an allotment (Mac or other)?
Posted By: Andy_Z
Re: Mandatory Allotment - 12/15/07 08:36 PM
A buyer of the loan may choose to buy only loans that are paying by allotment. But the lender may not condition approval of the loan on the repayment via allotment.
§205.10 Preauthorized transfers.
(e) Compulsory use —(1) Credit. No financial institution or other person may condition an extension of credit to a consumer on the consumer's repayment by preauthorized electronic fund transfers, except for credit extended under an overdraft credit plan or extended to maintain a specified minimum balance in the consumer's account.