CFPB Warns Banks About Questionable Auto Loans, Bloomberg Reports
At least four banks have 15 days to provide an explanation of their auto lending practices to the Consumer Financial Protection Bureau, or they could face lawsuits.
The U.S. Consumer Financial Protection Bureau (CFPB) has alerted at least four banks that they may face lawsuits over vehicle loans and interest-rate markups by auto dealers that appear discriminatory, according to Bloomberg.
The banks, which received letters from the CFPB last week, have 15 days to provide an explanation of the practice, according to the report.
The letters indicate that the banks may have violated the Equal Credit Opportunity Act, which bars discrimination in lending. They also suggest that the CFPB may be willing to sanction banks over mark-ups by auto dealers, which were excluded from the bureau’s supervision in the 2010 Dodd-Frank Law.
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