Old tools, new laws.(HEADLINE)

Wanda Borges, Esq. of Borges & Associates, LLC recently offered credit professionals legal tips for mitigating the sometimes cumbersome regulations imposed by recently passed or updated laws like the Equal Credit Opportunity Act (ECOA) and the Fair and Accurate Credit Transactions Act of 2003 (FACTA). Borges' presentation, "Old Tools, New Laws," was part of NACM's ongoing teleconference series, which offers credit professionals a convenient and effective way to improve their practices and educate their staff.

Borges began by discussing the ECOA, which was originally passed to ensure that credit decisions were not based on sex, race, color, creed, national origin, age or marital status, but was updated in 2003 to more clearly define certain terms. According to the law, customers must be notified if a vendor whom they've contacted for credit issues an adverse decision, which, according to the updated law, includes a refusal to grant the credit requested, a termination of an account or an unfavorable change in terms, and a refusal to increase the amount of credit available.

"What becomes harder to understand is what happens when things change," said Borges. "If [the customer] is not worthy of a $50,000 credit line, but they're worthy of a $20,000 credit line, go back to the customer." The ECOA states that when a creditor denies a request but counteroffers, and the customer agrees to the change, it does not constitute an adverse action and no formal notification is required. "You're required to get this in writing though," said ...