A Supervisory Highlights Report released by the CFPB Thursday said roughly 190,000 consumers have received $56 million in remediated funds after the bureau determined their indirectly supplied auto lenders had discriminated against them.
The alleged discrimination took place on loans the agency has reviewed in the last two years, the CFPB said, adding that the activity had financially damaged African-American, Hispanic, Asian, and Pacific Island borrowers.
“As a result, these borrowers paid more for their auto loans than similarly situated non-Hispanic white borrowers,” the CFPB said while declining to release details of the cases since they were non-public supervisory actions.
The agency referenced a large public enforcement action against Ally Bank and Ally Financial in 2013 that resulted in the organizations repaying $80 million to 235,000 consumers for discrimination against them in auto lending.
The CFPB also proposed new regulations that would allow it to regulate nonbank auto lenders.
Financial institutions that engage in indirect auto lending can protect their liability by monitoring their own policies and procedures for possible discriminatory practices, and limiting or eliminating the discretion of auto lenders' ability to mark up auto loans, the agency said.
Earlier this year, the Melbourne, Fla.-based Space Coast Credit Union launched an advertising campaign that referenced the Ally enforcement actions. However, the $3.2 billion credit union later withdrew it after objections from auto dealers.
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