A House Financial Services Committee report said the CFPB is erroneously sending settlement checks from Ally Financial to white borrowers after the lender's alleged racial discrimination against African-Americans, Hispanics and Asians.
Committee Chairman Jeb Hensarling (R-Texas) said the CFPB's actions "invite fraud on a massive scale" and called upon Attorney General Loretta Lynch to suspend the distribution of settlement checks until the eligibility of the recipients are confirmed in writing.
The report said that despite objections from the DOJ and CFPB staff, the bureau proceeded with a disparate impact calculation that allowed the agency to reach the maximum number of claimants without verifying their settlement eligibility. The result was some white borrowers got settlement checks.
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