ABA Promotes Adoption of NADA Fair Credit Program
On Aug. 3, the American Bar Association approved a resolution that, in part, urges governments at all levels to:
Adopt laws and policies that promote the adoption of an enhanced nondiscrimination compliance system for dealer compensation for arranging and/or originating a vehicle finance contract by offering a safe harbor against pricing discrimination claims for dealers that faithfully implement the NADA/NAMAD/AIADA Fair Credit Compliance Policy and Program.
The resolution, which was co-sponsored by the ABA Section of Civil Rights and Social Justice, Section of State and Local Government Law, and the Commission on Homelessness, recommended “safe harbor” protection to dealers who faithfully adopt the NADA fair credit program in lieu of a recommendation that governments consider requiring dealer finance compensation to be in the form of a non-discountable fixed fee. This was one of several significant improvements to the original resolution, which sought to impose a series of new duties and restrictions on the dealer finance office.
The action represents the latest recognition by a diverse and growing number of public and private groups of the value of the optional NADA fair credit program as an effective mechanism to address fair credit concerns while preserving competition in the marketplace. The program, along with supporting materials, is available at www.nada.org/faircredit. NADA continues to encourage dealers to consider, in consultation with their counsel, whether to adopt this voluntary approach to fair credit compliance.