§ 10403. Prohibition on discrimination based on sex, marital status, race, color, religion,
national origin, age, sexual orientation, gender identity, or disability
(a) Discrimination prohibited. No financial institution shall discriminate against any applicant for credit services
on the basis of the sex, marital status, race, color, religion, national origin, age,
sexual orientation, gender identity, or disability of the applicant, provided the
applicant has the legal capacity to contract.
(b) Rulemaking. The Department of Financial Regulation shall adopt rules necessary to carry out the
provisions of this section.
(c) Definitions. As used in this section:
(1) “Adverse action” means denial, revocation, or termination of credit services. The
term does not include a change in the terms of an account expressly agreed to by an
applicant nor any action or forbearance relating to an account taken in connection
with inactivity, default, or delinquency as to that account.
(2) “Applicant” means any person who applies to a financial institution directly for an
extension, renewal, or continuation of credit or applies to a financial institution
indirectly by use of an existing credit plan for an amount exceeding a previously
established credit limit.
(3) “Application” means an oral or written request for an extension of credit that is
made in accordance with procedures established by a financial institution for the
type of credit requested. The term does not include the use of an account or line
of credit to obtain an amount of credit that is within a previously established credit
limit. A completed application means an application in connection with which a financial
institution has received all the information that the financial institution regularly
obtains and considers in evaluating applications for the amount and type of credit
requested, including credit reports, any additional information requested from the
applicant, and any approvals or reports by governmental agencies or other persons
that are necessary to guarantee, insure, or provide security for the credit or collateral.
The financial institution shall exercise reasonable diligence in obtaining such information.
(4) “Credit services” means credit cards, personal loans, mortgage loans, and commercial
loans.
(5) “Financial institutions” means Vermont financial institutions, credit unions, and
licensed lenders.
(6) “Disability” applied to an applicant means a person with a disability as defined in
21 V.S.A. § 495d(5). As used in this section, an applicant with a disability does not include an alcoholic
or drug abuser who, by reason of current alcohol or drug use, constitutes an unacceptable
credit risk.
(7) “Person” means a natural person, a corporation, government or governmental subdivision
or agency, trust, estate, partnership, cooperative, association, or other entity.
(d) Notification requirements.
(1) Within 30 days of reaching a decision on a completed application, a financial institution
shall notify the applicant of its decision on the application.
(2) Each applicant against whom adverse action is taken shall receive a written statement
of reasons for such action from the financial institution.
(3) For commercial credit only, a statement of reasons meets the requirements of this
section only if it contains the specific reasons for the adverse action taken and
cites the specific documentation or business judgment that supports the adverse decision
on the application. Consumer credit shall be governed by the Equal Credit Opportunity
Act (15 U.S.C. § 1691 et seq.) and regulations adopted pursuant to the Act.
(4) Financial institutions shall be required to maintain a copy of all “statements of
reasons” and the documentation upon which the decision was based for 24 months after
the date of issuance.
(e) Civil enforcement. A financial institution that discriminates against an applicant in violation of this
section shall be liable to the applicant for punitive damages, for actual damages
sustained by the applicant as a result of the discrimination, and for costs and reasonable
attorney’s fees as determined by the court. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2007, No. 41, § 10; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2013, No. 96 (Adj. Sess.), § 24; 2019, No. 131 (Adj. Sess.), § 8; 2021, No. 105 (Adj. Sess.), § 280, eff. July 1, 2022.)