Ally Financial will pay $98 million to settle claims that it discriminated against minority car loan borrowers between April 2011 and this month. It marks the largest auto loan discrimination settlement in history.
The federal Consumer Financial Protection Bureau and U.S. Department of Justice said that more than 235,000 black, Hispanic and Asian borrowers were pushed into higher-cost loans.
The disparity stems from Ally's practice of setting a risk-based interest rate on car loans, and then allowing the dealer to mark up the price based on its discretion. The bank and the dealer then share the profits from the mark-up. A statistical analysis found that minority borrowers disproportionately had higher mark-ups.
Ally employs several hundred people in a namesake office tower uptown.
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Ally employs several hundred people in a namesake office tower uptown.
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2 comments:
If the risk based interest rate is determined by credit score, then that is not discrimination.
Why is it that Black is not capitalized?
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