Bureau Provides Help With Fair Lending Techniques to Indirect Auto Lenders
The Bulletin has no force or effect on May 21, 2018, the President signed a joint resolution passed by Congress disapproving the Bulletin titled “Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act” (Bulletin), which had provided guidance about the Equal Credit Opportunity Act (ECOA) and its implementing regulation, Regulation B. Consistent with the joint resolution. The ECOA and Regulation B are unchanged and stay in force and impact. See more details on complying utilizing the ECOA and Regulation B. The materials concerning the Bulletin regarding the Bureau’s web site are for guide just.
WASHINGTON, D.C. – Today, the customer Financial Protection Bureau (CFPB) released a bulletin describing that particular lenders that provide automotive loans through dealerships have the effect of unlawful, discriminatory prices. Potentially discriminatory markups in car lending may end up in tens of millions of dollars in customer damage each year, therefore the bulletin provides guidance to indirect car lenders in the CFPB’s jurisdiction on how best to address lending risk that is fair.
“Consumers should not need to pay more for car finance just according to their race, ” stated CFPB Director Richard Cordray. “Today’s bulletin clarifies our authority to pursue car loan providers whose policies harm consumers through illegal discrimination. ”
Whenever consumers finance automobile purchases from a car dealership, the dealer frequently facilitates indirect funding via a party lender that is third. The dealer plays a valuable part by originating the mortgage and finding financing sources. The lender usually provides the dealer with an interest rate that the lender will accept for a given consumer in this indirect auto financing process.
Indirect car loan providers often permit the dealer to charge the consumer mortgage loan this is certainly costlier for the consumer than the rate the loan provider provided the dealer. Read more