SW Legal studies in Business

ECOA Sets Strict Two-Year Statute of Limitations for Violation Actions

Federal appeals court held that a New York resident must sue a company accused of violating the federal Telephone Consumer Protection Act in state court, not federal court, and could not bring a class action suit, as it was not permitted by New York law.


Consumer Protection

Key Words

Equal Credit Opportunity; Racial Bias; Statute of Limitations

C A S E   S U M M A R Y

From 1993 to 1996, five African-American car buyers received dealer financing from their Nissan dealerships. The dealers assigned the loans to Nissan. The dealers had the ability to assign whatever interest rate to the customers they wished. The dealers captured the difference between the rate Nissan charged and the rate the dealers put on the loans. The dealers did not use credit ratings; they simply assigned the rate they thought would be accepted. Plaintiffs allege that the subjective markups resulted in higher interest rates for black car buyers than for white car buyers and that Nissan violated the Equal Credit Opportunity Act (ECOA) by cooperating in this arrangement with its dealers. Plaintiffs sued in 2002, six years after the last such loan was made. The district court dismissed the suit because it was outside of the two year statute of limitations. Plaintiffs appealed.


Affirmed. The limitations period set in the ECOA is a statute of repose. It provides a two-year limit in which to file suit. The two-year limit began when a loan was made, not when the alleged violation of the law was discovered. Hence, the suit cannot proceed.


Archer v. Nissan Motor Acceptance Corp., 550 F.3d 506 (5th Cir., 2008)

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