Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
Ally Financial Ordered to Repay $80M
WASHINGTON (12/23/13)--Allegations of discriminatory auto loan markup policies have resulted in an $80 million settlement between Ally Financial, the U.S. Dept. of Justice and the Consumer Financial Protection Bureau.

Under the terms of the settlement, Ally will pay $80 million in damages to consumers harmed by an alleged discriminatory markup policy that was used between April 2011 and Dec. 2013. The policy impacted more than 235,000 African-American, Hispanic, and Asian and Pacific Islander borrowers, the CFPB claimed.

According to the CFPB/DOJ order, Ally allowed auto dealers to mark up a consumer's interest rate above Ally's established buy rate. The financial firm then compensated dealers with funds obtained through the markups. "Ally did not monitor whether discrimination on a prohibited basis occurred through the charging of markups," the order said.

The CFPB/DOJ complaint said an analysis of Ally's lending practices found:
  • African-American borrowers were charged 29 basis points more than similarly-situated non-Hispanic whites, resulting in them paying more than $300 more in interest over the lifetime of their loan contracts;
  • Hispanic borrowers were charged 20 basis points more than similarly-situated non-Hispanic whites, resulting in them paying more than $200 more in interest over the lifetime of their loan contracts; and
  • Asian/Pacific Islander borrowers were charged 20 basis points more than similarly-situated non-Hispanic whites, resulting in them paying more than $200 more in interest over the lifetime of their loan contracts.
The order called on Ally to cease this markup practice, establish a compliance committee, and regularly report to the CFPB and DOJ on its compliance with non-discriminatory lending laws.

For a CFPB release on the order, use the resource link.
Other Resources

CFPB Release
RSS print
News Now LiveWire
Stay tuned for coverage of @CUNA's BSA conference which starts Sunday. #CUNABSA #CUNACompliance
1 Day ago
Today's the last day to complete @CUNA's Home Depot data breach survey http://t.co/UcB8G9bVXe #StoptheDataBreaches
1 Day ago
Brenda Davis of Cross Roads Ministries will walk through 83 communities during the Ending Hunger Walking tour. (2 of 2)
1 Day ago
The Ending Hunger Walking tour, coordinated by the Maine CU League, kicked off at Old Maine CU in Augusta today. (1 of 2)
1 Day ago
Darwin Brokke of Citizens Community CU represented the #CU Association of Dakotas at a housing summit hosted by @SenatorHeitkamp
1 Day ago