|HOME | STATS | PUBLICATIONS | REGISTER | ADVERTISE | ARCHIVE | ABOUT US | CONTACT US|
Justice Dept., Ally Financial reach $98 million settlement on discriminatory loans
(December 20, 2013) The Department of Justice and the Consumer Financial Protection Bureau (CFPB) today announced the federal government reached an agreement to resolve allegations that Ally Financial and Ally Bank engaged in an ongoing nationwide pattern or practice of discrimination against African-American, Hispanic and Asian/Pacific Islander borrowers since April 1, 2011.
The settlement is the largest ever agreement against an auto lender, and the third largest "fair lending" agreement ever reached. The agreement is the first joint fair lending enforcement action by the department and CFPB. With this agreement, eight of the top 10 largest fair lending settlements in the department's history have been under Attorney General Eric Holder's leadership.
The settlement provides $80 million in compensation for victims of past discrimination by one of the nation's largest auto lenders and requires Ally to pay $18 million to the CFPB's Civil Penalty Fund. Ally also must refund discriminatory overcharges to borrowers for the next three years unless it significantly reduces disparities in unjustified interest rate markups. This system will create a strong financial incentive to eliminate discriminatory overcharges.
"With this largest-ever settlement in an auto loan discrimination case, we are taking a firm stand against discrimination in a critical lending market," said Attorney General Eric Holder. "By requiring Ally to provide refunds to those who are overcharged because of their race or national origin, this agreement will ensure relief for Americans who are victimized."
The settlement resolves claims by the department and the CFPB that Ally discriminated by charging approximately 235,000 African-American, Hispanic and Asian/Pacific Islander borrowers higher interest rates than non-Hispanic white borrowers. The agencies claim that Ally charged borrowers higher interest rates because of their race or national origin, and not because of the borrowers' creditworthiness or other objective criteria related to borrower risk.
The average victim paid between $200 and $300 extra during the term of the loan. The Equal Credit Opportunity Act (ECOA) prohibits such discrimination in all forms of lending, including auto lending. Ally's settlement with the DOJ, which is subject to court approval, was filed today in the U.S. District Court.
Rather than taking applications directly from consumers, Ally makes most of its loans through over 12,000 car dealers nationwide who help their customers pay for their new or used car by submitting their loan application to Ally. Ally's business practice, like most other major auto lenders, allows car dealers discretion to vary a loan's interest rate from the price Ally initially sets based on the borrower's objective credit-related factors. Dealers receive greater payments from Ally on loans that include a higher interest rate markup.
Go to Target Market News homepage
Black TV Ratings for Week of Oct. 28 - Nov. 3 'Scandal' remains the most-watched TV show in black households for third week
Coke's Lori Billingsley, Black PR Society's Atlanta chapter honored at convention
Toyota's Green Initiative to deliver Prius hybrid vehicles to 22 HBCUs
New York Attorney General wants meetings with Macy's, Barneys on profiling charges
Black Cable TV Ratings for Week October 20 - 27 VH1 claims a ratings winner with original movie 'Crazy Sexy Cool' in No.1 spot
Black TV Ratings for Week of October 21 - 27 'Scandal' again sacks 'Sunday Night Football,' and ABC takes most watched title
Tavis Smiley, Cornell West ending their public radio show in December
Dr. Walter Lomax, legendary Philadelphia business leader who owned WURD, dies
Black Cable TV Ratings for Week Sept. 30 - Oct. 6 Cable viewing among black households still dim compared to network TV favorites
Black TV Ratings for Week of Sept. 30 - Oct. 6 'Scandal' sacks 'Sunday Night Football,' but NBC grabs most watched network title
Black Cable TV Ratings for Week September 23 - 29 VH1 takes back most watched title, but overall cable viewing has big drop for the week
Aspire network acquires cable rights for HBCU sports show, 'Inside The Game'
TV One signs five-year agreement to air NAACP Image Awards beginning in 2014
Black TV Ratings for Week of September 23 - 29 NBC overtakes CBS on Top 25 chart of most popular shows with black viewers
Jet magazine forms collaboration with VH1 host and blogger Delaina Dixon
AARP and Black Enterprise launch Small Business University online
Nielsen completes acquisition of Arbitron, will brand company as Nielsen Audio
Ed Lewis, Essence co-founder and chairman, to be Advertising Hall of Fame inductee
Click here for more recent news stories and our news archive
TARGET MARKET NEWS
228 S. Wabash Ave.
Chicago, Il 60604
Copyright (c) 2013 All rights reserved
firstname.lastname@example.org Supplier Services