If you look at Regulation B of the ECOA, it will identify the types of credit as defined by Congress. Two of those types are consumer credit and trade credit AKA business credit.

Trade credit is defined as self liquidating and is considered the only type of credit that is self liquidating because terms are generally very short and each transaction covers a specific purchase. Generally, there is no such thing as an "add on " once the invoice has been produced.

We, as trade creditors, have often told the customer in our collection efforts that "we are not the bank" and expect payment on the agreed to payment date. But, have we through our actions become the bank?

I would suggest that we have strayed from trade credit into the area of consumer credit. Now, we have had some help here. In 1990, Congress amended Regulation B to say that any business whose previous years revenues were less then one million dollars would be required to be treated as a consumer under the ECOA.

Our organization, through its actions, has communicated to the customer that their purchases may be installment rather then single payment. If we accept less then full payment for a invoice or past due balance and continue providing goods and/or services when the customer has not fulfilled their obligation, would this not be considered an installment agreement?  We may not have entered into an installment agreement initially but our actions certainly convey our acceptance of the customers intention of changing the agreement.

If a customer owes us lots of money in several aging categories, but pays us something every 30 days and we continue to sell to them every 30 days are they really past due? Under an installment agreement, I am of the opinion the answer would be no. As long as an agreeable minimum payment is received during a 30 day period the account would be deemed current.  

What do you think? You know how to contact me, let's here your opinion.

I wish you well.