Discriminatory auto finance and illegal credit card practices were dealt multi-million dollar blows recently. A joint investigation by the Consumer Financial Protection Bureau and the Department of Justice that began in January 2013, culminated on Sept. 28 with settlements related to multiple alleged violations of the Equal Credit Opportunity Act. The joint actions will affect Black and Latino customers of Fifth Third Bank’s 1,300 branches in 12 states.
The first and larger enforcement calls for $18 million to be paid to customers who financed auto purchases through Fifth Third from January 2010 through September 2015. CFPB and DOJ charged that Black and Latino customers were victims of illegal and discriminatory pricing that increased interest rates without regard to their credit-worthiness. Fifth Third allowed car dealers to raise consumers’ interest rates as much as 2.5 percent above the bank’s actual rate, also known as a “buy rate.” The bank also allowed car dealers to keep some or all of the difference as compensation.
About Post Author
