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Whether you're planning to start your
own business or expand the one you own, you may be in
the market for credit. When you shop for a loan or line
of credit, remember that the law protects you against
discrimination. The Equal Credit Opportunity Act (ECOA)
prohibits creditors from denying you a loan based on
reasons that have nothing to do with your credit-worthiness.
The Federal Trade Commission wants
you to know that:
You cannot be denied business credit on the basis
of your race, color, religion, national origin, sex,
marital status, or age - or that of your customers.
For example, if you request a loan to open a store,
a creditor can't deny your application based on your
race or your customers'.
If your application for business credit is rejected,
you can find out why. You must submit a written request
for the reasons within 60 days of the denial. The
creditor must give you the specific reasons - in writing
- within 30 days of your request. If you don't agree
with the reasons, consider discussing your concerns
with the lender; you may be able to resolve the issues.
If your business is small (less than $1 million
in gross revenues), the lender must keep records of
your credit application for one year after telling
you of the credit decision. If your business grosses
more than $1 million, the lender has to keep your
records on file for only 60 days after denying you
credit. If you ask that your records be kept longer,
however, or if you ask for a written statement of
the reasons for denial, the lender must keep your
file for a year. If you don't ask about the reasons
for denial within 60 days, the law permits the creditor
to destroy your records. Note that these records could
be important for any legal action you may consider
against a lender.
You have the right to sue a creditor
who doesn't comply with the law. If you have a complaint
about a government lender, public utility company, small
loan and finance company, travel and expense credit
card company, or other non-bank creditor, you may want
to file a complaint with the FTC.
The FTC works for the consumer to prevent fraudulent, deceptive
and unfair business practices in the marketplace and to provide information
to help consumers spot, stop, and avoid them. To file a
complaint or to get free
information on consumer issues, visit www.ftc.gov
or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The
FTC enters Internet, telemarketing, identity theft, and other fraud-related
Consumer Sentinel, a secure, online database available to hundreds of civil
and criminal law enforcement agencies in the U.S. and abroad.