News & Analysis as of

Automotive Loans Disparate Impact

Troutman Pepper

NY Department of Financial Services Reaches Settlement With Bank Over Alleged Fair Lending Violations Involving Auto Dealer...

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On October 6, the New York State Department of Financial Services (NYDFS) announced a consent order with Rhinebeck Bank (Rhinebeck) to resolve allegations that, in violation of New York Executive Law Section 296-a, the bank...more

McGlinchey Stafford

CFPB prioritizes fair lending, machine learning, privacy in digital engagement

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Members of the auto finance industry continue to have a strong appetite for developing their digital origination and servicing platforms. Much of the industry also has a desire to use data in novel and creative ways to...more

Hudson Cook, LLP

State Regulator Pursues Disparate Impact in Auto Finance

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Players in the auto finance industry have been watching the Consumer Financial Protection Bureau ping-pong over the last several years regarding disparate impact theories under the Equal Credit Opportunity Act. The disparate...more

Hudson Cook, LLP

The FTC, Auto Dealers, and Credit Discrimination: What's Next?

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We have looked at the Federal Trade Commission's sweeping case against Bronx Honda and its general manager. Was this case part of a concerted effort by the FTC to ferret out illegal credit discrimination by automobile...more

Ballard Spahr LLP

FTC settles lawsuit against car dealer alleging discriminatory pricing practices

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The FTC recently announced a settlement of its lawsuit filed in a New York federal district court against a New York City car dealership and its individual general manager in which the FTC alleged that the defendants...more

Ballard Spahr LLP

House Financial Services Subcommittee Holds Hearing on Discrimination in Auto Loans and Insurance

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This past Wednesday the House Committee on Financial Services’ Subcommittee on Oversight and Investigations held a hearing titled “Examining Discrimination in the Automobile Loan and Insurance Industries.” As the Majority...more

Davis Wright Tremaine LLP

States Diverge From Federal Regulators on Disparate Impact

Federal and state fair lending regulators are charting different courses for the future of “disparate impact” liability under the Equal Credit Opportunity Act and analogous state law....more

Ballard Spahr LLP

Will the NYDFS pick up the baton on disparate impact auto dealer pricing?

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If you’ve followed the status of the CFPB’s enforcement actions under the Equal Credit Opportunity Act related to auto dealer finance charge participation, you probably would have concluded that those cases are unlikely to...more

Ballard Spahr LLP

President Trump signs joint resolution disapproving CFPB Bulletin concerning discretionary pricing by auto dealers

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Yesterday afternoon, President Trump signed into law S.J. Res. 57, the joint resolution under the Congressional Review Act (CRA) that disapproves the CFPB’s Bulletin 2013-2 regarding “Indirect Auto Lending and Compliance with...more

Ballard Spahr LLP

CFPB indirect auto finance bulletin determined to be a “rule” subject to Congressional review

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Congress may have now have the opportunity to disapprove by a simple majority vote the CFPB’s disparate impact theory of assignee liability for so-called dealer “markup” disparities as a result of a determination by the...more

Ballard Spahr LLP

Republican members of House Financial Services Committee release new report on CFPB’s auto finance actions

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Republican members of the House Financial Services Committee recently released a report, prepared by the Republican Staff of the Committee, titled “Unsafe at Any Bureaucracy, Part III: The CFPB’s Vitiated Legal Case Against...more

Baker Donelson

Was a CFPB Enforcement Action Based on "Racial Profiling and Junk Science"?

Baker Donelson on

In a press release dated April 18, 2012, the Consumer Financial Protection Bureau (CFPB or Bureau) declared that it would "use all available legal avenues, including disparate impact, to pursue lenders whose practices...more

Ballard Spahr LLP

Director Cordray defends CFPB positions in appearance before Senate Banking Committee; comments on small business lending and...

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Much of Director Cordray’s testimony in his appearance before the Senate Banking Committee yesterday consisted of his predictable defense of various CFPB positions. While the hearing was much less contentious than last...more

Ballard Spahr LLP

Director Cordray appears before House Financial Services Committee

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Director Cordray was the sole witness at the hearing held yesterday by the House Financial Services Committee, which was entitled “The Semi-Annual Report of the Bureau of Consumer Financial Protection.” In November 2015, the...more

BakerHostetler

Disparate Impact Continues to be a Viable Discrimination Theory for the CFPB under the ECOA

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On Wednesday, March 16, 2016, the House Financial Services Committee hosted the Consumer Financial Protection Bureau’s (“CFPB”) Director Richard Cordray for a hearing on “The Semi-Annual Report of the Bureau of Consumer...more

McGuireWoods LLP

CFPB Poised to Continue Focused Scrutiny of Indirect Auto Lenders

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Earlier this month, the Consumer Financial Protection Bureau (CFPB) announced a joint enforcement action with the Department of Justice (DOJ) against Toyota Motor Credit Corporation (TMCC), an indirect auto lender, which,...more

K&L Gates LLP

Fair Lending Year in Review – 2015

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2015 was an action-packed year for fair lending, including a long-anticipated Supreme Court decision on disparate-impact claims under the Fair Housing Act (“FHA”), record-breaking redlining settlements, a new round of...more

Goodwin

House Republicans Level Another Blow at CFPB’s Auto-Lending Policies

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Scrutiny of the CFPB’s auto-lending supervision and enforcement practices was renewed last week when Republicans on the U.S. House of Representatives Committee on Financial Services issued another scathing report criticizing...more

Ballard Spahr LLP

Fair Lending Director Ficklin Discusses Small Business Lending, LGBT issues, LEP consumers and Inclusive Communities at ABA...

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Last Thursday, I had the pleasure of teaching a class on payments and banking products to new lawyers at the American Bar Association’s Consumer Financial Services Institute. I arrived early for the class and got to hear a...more

MoFo Reenforcement

CFPB Refers Another Auto Finance Company to DOJ on Disparate Impact Allegations

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Not long after taking action against American Honda Finance Corporation under the disparate impact doctrine for allegedly discriminatory auto loan pricing, the CFPB has struck again—this time reportedly referring Santander...more

McNees Wallace & Nurick LLC

Supreme Court Slams The Brakes On Challenge To Disparate Act

As of now, the Equal Credit Opportunity Act (ECOA) prohibits dealers from unintentional, or “disparate impact,” discrimination in setting dealer reserves in auto financing. This disparate impact can result from policies or...more

Ballard Spahr LLP

Auto Finance Company Agrees to Change Dealer Compensation Policy to Settle CFPB and DOJ Fair Lending Claims

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To resolve charges by the Consumer Federal Protection Bureau (CFPB) and the Department of Justice (DOJ) that it engaged in unlawful discrimination in violation of the Equal Credit Opportunity Act (ECOA), American Honda...more

MoFo Reenforcement

CFPB Brings First ECOA Disparate Impact Action Post-Inclusive Communities

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Just over 18 months after bringing a disparate impact-based ECOA case against Ally Financial (“Ally”) for discriminatory auto loan pricing, the CFPB has struck again—this time taking action against American Honda Finance...more

Ballard Spahr LLP

CFPB may provide details on auto finance disparate impact methodology at tomorrow’s field hearing

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Since the CFPB issued its guidance on indirect auto finance in March 2013, lawmakers and industry have been asking the CFPB to provide details concerning its methodology and proxies for analyzing potential fair lending...more

Skadden, Arps, Slate, Meagher & Flom LLP

"Consumer Financial Protection Bureau Focuses on Fair Lending"

Having enacted a number of mortgage-related rules on the eve of statutory deadlines, the Consumer Financial Protection Bureau (CFPB), which now has a confirmed director, has shifted its focus to fair lending enforcement,...more

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