WASHINGTON ─ Thirteen Democrats from the United States Congress sent a letter to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray Tuesday, demanding to know the methods the bureau is using to determine whether minorities are being treated unfairly in retail installment sales transactions.

In March, the CFPB said it would hold lenders that offer auto loans through dealerships responsible for unlawful, discriminatory pricing. It alleged that bank policies which allow auto dealers to mark up the interest rates on retail installment sale transactions in exchange for services rendered have caused a disparate impact, meaning that members of minority groups pay higher rates.

“As representatives of both consumers and small businesses (auto dealers), we want to continue our work with you to ensure that lending practices in the auto, mortgage, and credit card industries are fair and equitable,” the letter states.

“Accordingly, we respectfully ask that you provide us as Members of Congress with any and all background information about the origination of and investigation into alleged practices within the auto lending industry.”

Dealers and industry experts have criticized the bureau for targeting the auto-lending market without being clear on how it identifies discriminatory practices. 

The letter also questioned a recent guidance issued by the CFPB to indirect auto lenders intended to help them operate in compliance with fair lending laws as applied to dealer markup and compensation policies. “… we would like to learn more about the compliance expectations contained in the recent guidance,” the letter states.

According to the letter, the CFPB has until June 7 to respond to the requests. To read the full letter, click here.