Roger Jameson is the head of the consumer loan department at First National Bank. He is a regular participant in a lending committee of a local finance trade association. The committee meets once a month at a local hotel. After the committee meetings, Roger and several other committee members who are officers at other banks in town go to a hotel restaurant and talk for a couple of hours before leaving. During these informal conversations Roger learned that the other members require the car dealerships in town that sell consumer installment contracts to the banks to refrain from selling them to local savings and loan associations. Roger believes that this is a good idea and would like to implement it at First National. Is there a problem with doing so?

Question

Quizplus · Accepted Answer

Restricting the dealerships from selling consumer installment contracts to certain institutions is a restraint of trade and is illegal under antitrust laws. It limits competition and may result in higher prices for consumers. Roger should not implement this idea at First National Bank.

Roger Jameson Is the Head of the Consumer Loan Department