Vermont Statutes Title 8 Sec. 10403
Terms Used In Vermont Statutes Title 8 Sec. 10403
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Equal Credit Opportunity Act: Prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or because an applicant receives income from a public assistance program. Source: OCC
- Fees: shall mean earnings due for official services, aside from salaries or per diem compensation. See
- Forbearance: A means of handling a delinquent loan. A
- gender identity: means an individual's actual or perceived gender identity, or gender-related characteristics intrinsically related to an individual's gender or gender-identity, regardless of the individual's assigned sex at birth. See
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Person: shall include any natural person, corporation, municipality, the State of Vermont or any department, agency, or subdivision of the State, and any partnership, unincorporated association, or other legal entity. See
- sexual orientation: means female or male homosexuality, heterosexuality, or bisexuality. See
§ 10403. Prohibition on discrimination based on sex, marital status, race, color, religion, national origin, age, sexual orientation, gender identity, or disability
(a) Discrimination prohibited. No financial institution shall discriminate against any applicant for credit services on the basis of the sex, marital status, race, color, religion, national origin, age, sexual orientation, gender identity, or disability of the applicant, provided the applicant has the legal capacity to contract.
(b) Rulemaking. The Department of Financial Regulation shall adopt rules necessary to carry out the provisions of this section.
(c) Definitions. As used in this section:
(1) “Adverse action” means denial, revocation, or termination of credit services. The term does not include a change in the terms of an account expressly agreed to by an applicant nor any action or forbearance relating to an account taken in connection with inactivity, default, or delinquency as to that account.
(2) “Applicant” means any person who applies to a financial institution directly for an extension, renewal, or continuation of credit or applies to a financial institution indirectly by use of an existing credit plan for an amount exceeding a previously established credit limit.
(3) “Application” means an oral or written request for an extension of credit that is made in accordance with procedures established by a financial institution for the type of credit requested. The term does not include the use of an account or line of credit to obtain an amount of credit that is within a previously established credit limit. A completed application means an application in connection with which a financial institution has received all the information that the financial institution regularly obtains and considers in evaluating applications for the amount and type of credit requested, including credit reports, any additional information requested from the applicant, and any approvals or reports by governmental agencies or other persons that are necessary to guarantee, insure, or provide security for the credit or collateral. The financial institution shall exercise reasonable diligence in obtaining such information.
(4) “Credit services” means credit cards, personal loans, mortgage loans, and commercial loans.
(5) “Financial institutions” means Vermont financial institutions, credit unions, and licensed lenders.
(6) “Disability” applied to an applicant means a person with a disability as defined in 21 V.S.A. § 495d(5). As used in this section, an applicant with a disability does not include an alcoholic or drug abuser who, by reason of current alcohol or drug use, constitutes an unacceptable credit risk.
(7) “Person” means a natural person, a corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, association, or other entity.
(d) Notification requirements.
(1) Within 30 days of reaching a decision on a completed application, a financial institution shall notify the applicant of its decision on the application.
(2) Each applicant against whom adverse action is taken shall receive a written statement of reasons for such action from the financial institution.
(3) For commercial credit only, a statement of reasons meets the requirements of this section only if it contains the specific reasons for the adverse action taken and cites the specific documentation or business judgment that supports the adverse decision on the application. Consumer credit shall be governed by the Equal Credit Opportunity Act (15 U.S.C. § 1691 et seq.) and regulations adopted pursuant to the Act.
(4) Financial institutions shall be required to maintain a copy of all “statements of reasons” and the documentation upon which the decision was based for 24 months after the date of issuance.
(e) Civil enforcement. A financial institution that discriminates against an applicant in violation of this section shall be liable to the applicant for punitive damages, for actual damages sustained by the applicant as a result of the discrimination, and for costs and reasonable attorney’s fees as determined by the court. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2007, No. 41, § 10; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2013, No. 96 (Adj. Sess.), § 24; 2019, No. 131 (Adj. Sess.), § 8; 2021, No. 105 (Adj. Sess.), § 280, eff. July 1, 2022.)