In a memorandum to all Connecticut sales finance company licensees last week, Banking Commissioner Jorge Perez pointed out that a statute in the act previously asked finance companies to include ethnicity, race and sex of loan applicants, if known. The amended statute removed the phrase "if known," implying that lenders must ask for this information.
"There was kind of a safety valve by having the words 'if known' because most auto finance lenders or sales finance companies would not be asking this information," Rojc said.
The amendment, passed this year by the Connecticut Legislature, applies only to retail installment contracts, not direct loans or leases. Because the contracts are handled during the loan application process, both the lender and dealership could be required to collect the applicant's ethnicity, race and gender, Rojc said.
While the requirement is directed toward sales finance companies, "the dealers are very much a party of the origination channel and will route the application to the potential creditors," he said.