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AARON L. OSBORNE AND BONITA R. OSBORNE, HUSBAND AND WIFE, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS, V. BANK OF AMERICA, NATIONAL ASSOCIATION , DEFENDANT, 234 F. SUPP.2D 804, NO. 3:02-0364 (M.D. TN. SEPT. 23, 2002)

African-American car buyers brought class action against bank upon whose behalf automobile loans were made, and to which loans were assigned, for alleged violations of the Equal Credit Opportunity Act (ECOA) in connection with markups allegedly applied on loans to African-American customers. On motion to dismiss for failure to state claim, the District Court, Trauger, J., held that: (1) bank to which automobile loans were assigned by dealerships could be deemed the "originating creditor," in ECOA action arising out of dealerships' application of markups to these loans in alleged racially discriminatory manner; (2) allegations in automobile buyers' complaint, that dealerships, in extending car loans on bank's behalf, applied markups to loans in racially discriminatory manner pursuant to bank policy of encouraging subjective markups unrelated to creditworthiness of buyers, sufficiently averred agency relationships between dealerships and bank to hold bank liable, on agency theory, for any violation of the ECOA by dealerships; (3) bank could not avoid liability simply by delegating aspects of financing transactions to dealerships; and (4) buyers sufficiently alleged requisite causal connection between bank policy and racially discriminatory effect to state disparate impact claim against bank. Motion denied.
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