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Credit Discrimination: H.2 Interrogatories for ECOA Cosigner Violation

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

[Consumer],

Plaintiff,

v.

Fast Finance Corporation,

Defendant.

INTERROGATORIES

Pursuant to Rule 33 of the Federal Rules of Civil Procedure, the following interrogatories are addressed to defendant Fast Finance Corporation by plaintiff, [Consumer], to be answered under oath by defendant’s representative and returned within thirty (30) days.

Credit Discrimination: H.3 Interrogatories for ECOA “ZIP Code Redlining”

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF MICHIGAN

[Consumer],

Plaintiff,

v.

OPEC Oil Company,

Defendant.

PLAINTIFF’S FIRST SET OF INTERROGATORIES TO DEFENDANT

Comes now, [Consumer], plaintiff herein and pursuant to the Federal Rules of Civil Procedure and 15 U.S.C. § 1691e(i) requires the defendant to answer under oath the following interrogatories within the time and in the manner provided by law.

Credit Discrimination: H.4 Plaintiffs’ Interrogatories in a Fair Housing Case

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

[Consumer 1] and [Consumer 2],

Plaintiffs,

v.

JP Morgan Chase Bank, N.A.;

U.S. Bank National Association;

California Reconveyance Corporation;

and DOES 1-50,

Defendants.

Case No. _______________

PLAINTIFFS’ SPECIAL INTERROGATORIES TO JP MORGAN CHASE BANK (SET ONE)

Credit Discrimination: 8.1 Introduction

This chapter examines credit discrimination law’s application to predatory lending, unfair credit terms, and even abuses concerning a transaction’s cash price.

Credit Discrimination: 8.4 Class Action Claims

Because of the nature of the claims discussed in this chapter, it will often make sense to bring claims on behalf of a class of borrowers rather than a single individual. Attorneys with limited class action experience should find knowledgeable co-counsel; this is not only prudent but is a prerequisite to class certification, which requires fair and adequate representation.25

Credit Discrimination: 8.5.1 General

Redlining is the practice of denying credit to particular neighborhoods on a discriminatory basis.38 The flip side is reverse redlining, the practice of targeting these same communities or protected classes for predatory lending. In some cases, the creditor may not even offer better terms to other borrowers; the key element of reverse redlining is the targeting of protected racial groups, older people, and others for unusually bad credit terms.

Credit Discrimination: 8.5.3 Unfair Credit Terms Sufficient to Show Reverse Redlining

It is not enough to show that a lender targets a protected class. The plaintiff must also show that the lender targets the protected class to offer unfair or predatory loans. A discrimination claim is also actionable if the lender merely offers less advantageous terms to protected classes than to others.57 But, if the allegation is that the lender targets protected classes but offers the same terms to others, then the plaintiff must also show that those terms are unfair or predatory.

Credit Discrimination: 8.5.4 Borrowers Should Not Need to Demonstrate Qualification for a Loan

A number of credit discrimination cases concerning the denial of credit enunciate a required element that the consumer “qualify for a loan.” While this makes sense in the context of challenging a credit denial, it should not be a necessary element of a reverse redlining claim. As discussed above, one aspect of reverse redlining is that lenders may make very expensive loans to borrowers who are clearly unable to afford them.

Credit Discrimination: 8.6.1 The Practice Described

In many credit contexts, lenders establish risk-based credit terms for a consumer and then give discretion to dealers, brokers, loan officers, and others to mark up the credit charges based upon subjective factors.

Credit Discrimination: 8.6.3 Elements of the Discrimination Claim: Disparate Impact Versus Disparate Treatment

Dealers, brokers, and others who mark up loans on a subjective basis may discriminate against those belonging to protected classes, setting up a basic disparate treatment claim under the Equal Credit Opportunity Act (ECOA), the Fair Housing Act (FHA), and the federal Civil Rights statutes. With evidence of disparate treatment, the discrimination case should be a strong one because there is no defense that the higher rate was based upon risk.

Credit Discrimination: 8.6.5 Statistical Proof of the Discriminatory Impact

The plaintiff has the burden of showing that the identified pricing policy, despite being facially neutral, has a disparate impact on a protected class. To do so requires proof that the protected class pays more in upcharges than other borrowers. The consumer must show “statistical evidence of a kind and degree sufficient to show that the practice in question has caused” the assessment of the higher finance charge mark-up on plaintiffs “because of their membership in a protected group.”116

Credit Discrimination: 8.6.6 Business Necessity and a Less Discriminatory Alternative

When a consumer in a discretionary mark-up case shows that the pricing policy has a disparate impact on a protected class, the lender must present a business necessity for the practice.122 The fact that the protected class on average includes higher credit risks cannot be a justification because the upcharge is not based upon risk.123 Lenders may claim a business necessity that they must provide incentives to dealers or brokers so that these third parties will steer business to the lender, n

Credit Discrimination: 8.7.2 Types of Price Discrimination

One example of illegal price discrimination is when identical goods are sold at different stores owned by the same merchant at different prices, with the higher priced goods being sold in neighborhoods made up primarily of people of color. There can also be differences in the goods’ quality and the store’s policies as to refunds, exchanges, and warranties.131 The merchant will have to justify this different treatment by increased costs of business in the neighborhood of color.

Credit Discrimination: 9.1 Introduction

Federal and state credit discrimination statutes cover a wide range of credit activity. Most of the litigation in this area focuses on the application process and other transactions in which consumers are denied credit on a discriminatory basis. This chapter discusses often overlooked claims that might arise after credit is granted.

Credit Discrimination: 9.2.1 Loan Servicing

The official interpretations of Regulation B give “administration of accounts” as an example of the types of dealings between creditor and applicant that are covered by the Equal Credit Opportunity Act’s (ECOA) general prohibition against discrimination.1 Thus, a creditor cannot discriminate on a prohibited basis with respect to ease of payment, willingness to restructure or postpone payments, providing information about account balances, or denying a loan modification.2 Under the Fair Housing A