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WASHINGTON, Dec. 9, 1999 -- The Federal Trade Commission has negotiated
an agreement under which Ford Motor Credit Corp. will
pay $650,000 for alleged violations of the Equal Credit Opportunity Act (ECOA).
According to the FTC, for a 15-month period from May 1994 to August
1995, Ford Credit discriminated against certain credit applicants by
failing to aggregate the income of unmarried joint applicants, while
combining incomes for applicants who were married. As a result, the FTC
alleged, many unmarried joint applicants were offered credit on less
favorable terms than married applicants.
"Millions of consumers use
credit," said Jodie Bernstein, Director of the FTC's Bureau of
Consumer Protection, "and the Equal Credit Opportunity Act
guarantees that they are given an equal chance to get it. While lenders
can use a variety of factors to compute a consumer's creditworthiness,
marital status isn't one of them. This settlement tells lenders and
would-be borrowers that credit discrimination won't be tolerated."
The $650,000 is among the largest
settlements ever obtained by the Commission in an ECOA-related matter;
in May of this year Franklin Acceptance Corporation, a
Philadelphia-based finance company, paid an $800,000 civil penalty for
similar alleged ECOA violations, as well as Fair Credit Reporting Act
violations.
The ECOA
prohibits discrimination against an applicant for credit on the basis of
race, color, religion, national origin, sex, marital status, or the fact
that an applicant's income is derived from public assistance. Regulation
B specifically prohibits discounting or refusing to consider income on
the basis of marital status.
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