The antitrust laws are designed to ensure that business is conducted in an open, competitive atmosphere and that competition should not be unreasonably restricted. The challenging aspect of antitrust laws is that it is complicated and the general language in which the statutes are written does not specify the exact conduct that would be considered a violation. Therefore, you should review these guidelines at least annually.
What Is Prohibited
Prohibited by the antitrust laws are agreements to:
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Fix prices (for example, the compensation a lender receives for loans, including interest rates, compensating balances, and other accommodations).
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Divide markets or customers.
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Boycott or jointly refuse to deal with customers or other financial institutions.
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Arrive at any understanding, express or implied, respecting any anticompetitive concert of action.
An anticompetitive agreement need not be formal or even express and can be proven by circumstantial evidence. Thus, if such circumstances as the exchange of pricing plans permit the inference of a tacit understanding to “act in concert” or “follow the leader,” a jury may be allowed to find intentional violation of the law. The courts have sometimes deemed trade associations as possible “hotbeds of conspiracy.”
Thus, RMA is desirous that none of its activities, as carried out by its members, even remotely suggest antitrust misconduct. Therefore, to avoid accusations of violating antitrust laws, whenever you attend an RMA event, keep in mind these basic guidelines:
What You Should Avoid
At RMA meetings and round tables and even in conversations:
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Do not agree—or engage in any form of conduct from which it nay be argued that you agreed—to fix interest rates, fees, or any other element of the price or terms of loans.
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Do not share information concerning your prices or fees on matters such as costs that affect your price.
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Do not agree to treat a particular individual or group of customers in one set manner or to boycott or stop lending to certain kinds of customers.
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Do not allocate customers or territories.
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Do not make announcements concerning what your institution may or may not do concerning loan or other terms for certain classes of customers.
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Do not disclose confidential, proprietary, or competitive information or your bank’s sensitive corporate strategies.
What You Can Do
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You may discuss common problems and challenges of a general, administrative, or logistical nature as long as a purpose is not to encourage uniform action and the elimination of competition with respect to future transactions. It is permissible to discuss deteriorating or problematic credit areas.
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You may exchange credit information as long as you do not agree to boycott delinquent debtors, regulate credit terms, or fix prices. To minimize risk on problem accounts, information provided to others should be limited to bank ledger data or other records that are believed factual and accurate.
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You may communicate with respect to a unified position vis-à-vis government agencies. But be careful that you do not give a speech with respect to standing up to groups of competitors or to anyone except the government.
How You Can Avoid the Appearance of Impropriety
As a chapter leader or organizer of RMA meetings, use common sense to consider which of the following suggestions, if any, should be applied in a particular case:
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Prepare an agenda or list that sets out the subjects for discussion.
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Take minutes that accurately reflect the content of the meeting.
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Have an attorney present at gatherings of peers, when you deem it appropriate after studying this document, to monitor and, if necessary, redirect the conversation to keep the group away from inappropriate discussions.
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Seek the advice of legal counsel if your chapter wishes to consider membership eligibility or expulsion of a member, creation of a code of ethics or other forms of self-regulation, or the development of joint statistical or cooperative research programs.
Why You Should Be Concerned
Federal antitrust statutes originated with the Sherman Antitrust Act and include the Clayton, Robinson-Patman, and the Federal Trade Commission acts. These laws make monopolization and unreasonable restraints of trade illegal. Their violation may be a felony punishable by large fines and imprisonment, and a number of executives guilty of antitrust crimes have been sentenced to jail.
In addition, corporations and other persons injured by violation of federal (and many state) antitrust laws may recover treble damages and all their attorneys’ fees. As a result, bringing antitrust lawsuits is encouraged, and accused individuals and corporations, whether innocent or guilty, are exposed to the aggravation, inconvenience, and costs of defense. Remember, the mere exchange of price, product, or cost information can give rise to an investigation.
Your ultimate task, as an Associate in RMA, is to avoid any appearance or basis for characterization of impropriety and not just to remain honest in fact. Accordingly, there is a need for all RMA members to ensure their own compliance with these guidelines and to tactfully suggest to others, who might inadvertently stray, that being vigilant benefits us all.