It didn't take long to hear the buzz when the Consumer Financial Protection Bureau reminded indirect lenders that they must comply with certain regulations to ensure that they are not discriminating against minorities when marking up interest rates.
The CFPB confirmed that some indirect auto lenders have policies that allow auto dealers to mark up lender-established buy rates and compensate dealers for those markups, which are referred to as markup and compensation policies.
The CFPB said because of the incentives these policies create, and the discretion they permit, there is a significant risk that they will result in pricing disparities on the basis of race, national origin and potentially other prohibited bases.
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