An important compliance issue under the federal Truth In Lending Act is whether a dealer can recover from a consumer a fee that a finance source has charged the dealer for taking assignment of a credit contract and, if so, how that fee must be disclosed to the consumer. This consideration, which often arises when extending credit to consumers with subprime credit scores, is addressed in a memorandum from the Hudson Cook Law Firm.
Dealers who assign credit contracts to finance sources that charge a subprime acquisition fee are encouraged to review this memorandum with their legal counsel.
Dealer/Principals: Please forward this to your legal counsel and compliance officers.
Chairman, Regulatory Affairs Committee