UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS

UNITED STATES OF AMERICA, Plaintiff,

v.

BONLAR LOAN CO., INC., a corporation, and
LARRY METNICK, individually and as an officer of the corporation, Defendants.

COMPLAINT FOR CIVIL PENALTIES, INJUNCTIVE AND OTHER RELIEF

Civil No.

Plaintiff, the United States of America, acting upon notification and authorization to the Attorney General by the Federal Trade Commission ("Commission"), for its complaint alleges that:

  1. Plaintiff brings this action under Sections 5(a)(1), 5(m)(1)(A), 9, 13(b), and 16(a) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C.  45(a)(1), 45(m)(1)(A), 49, 53(b), and 56(a), as amended, and under the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C.  1691-1691(f), as amended, and under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C.  1681-1681t, as amended, to obtain monetary civil penalties for defendants' violations of the ECOA and Federal Reserve Board Regulation B, 12 C.F.R.  202 ("Regulation B"), and injunctive and other relief.

JURISDICTION AND VENUE

  1. This court has jurisdiction over this action under 28 U.S.C.  1331, 1337(a), 1345, and 1355 and under 15 U.S.C.  45(a)(1), 45(m)(1)(A), 49, 53(b), 56(a) and 1691c.
  2. Venue in the Northern District of Illinois is proper under 15 U.S.C.  53(b) and under 28 U.S.C.  1391(b) and (c), and 1395(a).

    DEFINITIONS

  3. As used in this Complaint:
    1. the Equal Credit Opportunity Act or the ECOA refers to 15 U.S.C.  1691-1691f, as amended;
    2. "Regulation B" refers to the Federal Reserve Board Regulation B, 12 C.F.R.  202, as amended;
    3. the terms "adverse action," "applicant," "application," "credit," "consumer credit," and "creditor" are defined as provided in Regulation B, 12 C.F.R.  202.2;
    4. The Fair Credit Reporting Act or FCRA refers to 15 U.S.C.  1681-1681t, as amended; and
    5. the terms "consumer," "consumer report," and "consumer reporting agency" are defined as provided in Sections 603(c), (d), and (f) respectively of the FCRA, 15 U.S.C. 1681a(c), (d), and (f).  

    DEFENDANTS

  4. Defendant Bonlar Loan Co., Inc. is an Illinois corporation, with its office and principal place of business located at 2247 W. Lawrence Avenue, Chicago, Illinois 60625. The company transacts business in the Northern District of Illinois. Bonlar Loan Co., Inc. is a consumer finance company engaged in providing personal and retail loans to consumers.
  5. Defendant Larry Metnick is the president of Bonlar Loan Co., Inc. Individually or in concert with others, defendant Larry Metnick has formulated, directed, and controlled the acts and practices of Bonlar Loan Co., Inc., including the acts and practices set forth herein. His business address is the same as that of the corporate defendant. In connection with the matters alleged herein, Larry Metnick has transacted business in the Northern District of Illinois.
  6. At all times material herein, defendants have each been a "creditor" as that term is defined by Section 702(e) of the ECOA, 15 U.S.C.  1691a(e), subject to the requirements of the ECOA and Regulation B.

    VIOLATIONS OF THE ECOA AND REGULATION B

FIRST COUNT

  1. On numerous occasions, when defendants have taken adverse action on an application for consumer credit, defendants have:
    1. failed to provide the applicant with written notification of the action taken, and
    2. failed to provide the specific, principal reason(s) for adverse action or to disclose the applicant's right to a written statement of the reasons for the adverse action,
    3. thereby violating Section 701(d) of the ECOA, 15 U.S.C.  1691(d), and Sections 202.9(a) and (b) of Regulation B, 12 C.F.R.  202.9(a) and(b).

SECOND COUNT

  1. On numerous occasions, defendants have, where the applicant applied for individual unsecured credit, inquired about the applicant's marital status, in a situation where the following did not apply:
    1. the applicant resided in a community property state; or
    2. the applicant was relying on property located in a community property state as a basis for repayment of the credit requested,
    3. thereby violating Section 202.5(d)(1) of Regulation B, 12 C.F.R.  202.5(d)(1).

THIRD COUNT

  1. On numerous occasions, defendants have inquired about the applicant's marital status by using terms other than "married," "unmarried," and "separated," such as "comm. law," "single," "divorced," and "widowed," thereby violating Section 202.5(d)(1) of Regulation B, 12 C.F.R.  202.5(d)(1).

FOURTH COUNT

  1. On numerous occasions, defendants have inquired on their application form about the applicant's "wife," a term that is not neutral as to sex, thereby violating Section 202.5(d)(3) of Regulation B, 12 C.F.R.  202.5(d)(3).

VIOLATIONS OF THE FAIR CREDIT REPORTING ACT

FIFTH COUNT

  1. On numerous occasions, when defendants have denied credit to a consumer, either in whole or in part because of information contained in a consumer report from a consumer reporting agency, defendants have failed to:
    1. advise the applicant that the adverse action was based in whole or in part on information contained in a consumer report; and
    2. supply the applicant with the name and address of the consumer reporting agency making said report,
    3. thereby violating Section 615(a) of the FCRA, 15 U.S.C.  1681m(a).

Pursuant to Section 621 of the FCRA, 15 U.S.C.  1681s, defendants' violations of the FCRA constitute unfair or deceptive acts or practices in commerce, in violation of Section 5(a) of the FTC Act, 15 U.S.C.  45(a).

CIVIL PENALTIES AND INJUNCTION

  1. Defendants have violated the ECOA and Regulation B, as described above, with knowledge as set forth in Section 5(m)(1)(A) of the FTC Act, 15 U.S.C.  45(m)(1)(A).
  2. Each instance, during the five years preceding the filing of this complaint, in which defendants have violated the ECOA and Regulation B in one or more of the ways described above constitutes a separate violation for which plaintiff seeks monetary civil penalties.
  3. Section 5(m)(1)(A) of the FTC Act, 15 U.S.C.  45(m)(1)(a) authorizes the Court to award monetary civil penalties of not more than $10,000 for each such violation of the ECOA and Regulation B.
  4. Under Section 13(b) of the FTC Act, 15 U.S.C.  53(b), this Court is authorized to issue a permanent injunction prohibiting defendants from violating the FCRA, the ECOA and Regulation B, as well as ancillary equitable relief.

PRAYER FOR RELIEF

WHEREFORE, plaintiff requests that this Court, pursuant to 15 U.S.C.  45(a), 45(m)(1)(A), 49, and 53(b), and pursuant to this Court's own equity powers:

  1. Enter judgment against defendants and in favor of plaintiff for each violation alleged in this complaint;
  2. Award plaintiff monetary civil penalties for each violation of the ECOA and Regulation B as alleged in this Complaint;
  3. Enjoin defendants from violating the ECOA, Regulation B, and the FCRA;
  4. Order defendants to pay the costs of this action; and
  5. Award such other relief as may be just and proper.

Respectfully submitted,

SCOTT R. LASSAR
United States Attorney
Northern District of Illinois

JOAN LASER
Assistant United States Attorney
219 S. Dearborn St. 5th Floor
Chicago, IL 60604
(312) 353-1857

ISABELLE M. THABAULT
Deputy Chief

GAVIN C. DOWELL
Attorney
Housing and Civil Enforcement Section
Civil Rights Division
U.S. Department of Justice
P.O. Box 65998
Washington, D.C. 20035
(202) 307-3803

Of Counsel:

DAVID MEDINE
Associate Director for Credit Practices

LUCY MORRIS
Assistant Director for Credit Practices

LAUREN B. STEINFELD
Attorney

SUSAN M. CAMP STOCKS
Attorney
Bureau of Consumer Protection
Federal Trade Commission
Washington, D.C. 20580

ISABELLE KATZ PINZLER
Acting Assistant Attorney General
Civil Rights Division

JOAN A. MAGAGNA
Acting Chief
Housing and Civil Enforcement Section