Honda revealed in a regulatory filing this week that its captive finance company is facing discrimination charges by the CFPB and DOJ. The revelation comes a week after Toyota’s captive said it is facing similar allegations.
Toyota Motor Credit Corporation issued a statement to F&I and Showroom regarding last week’s regulatory filing. It revealed that the CFPB and the DOJ are alleging that the captive’s practices in the auto finance sector have resulted in the discriminatory pricing of auto loans.
Following an announcement that it would seek supervisory authority over 38 nonbank auto finance companies, the CFPB held a field hearing on the topic in Indiana this morning.
During the CFPB’s semi-annual report to the House Financial Services Committee, Director Richard Cordray said the agency will be releasing a white paper on the methodology it uses to determine the presence of discrimination in auto loans.
Seven financial organizations issued a letter to the U.S. House of Representatives on May 29 in support of an amendment to an appropriations bill that would limit Justice Department litigation relying on the disparate impact theory of discrimination.
A memo released by the NADA this week states that the CFPB’s proposed method for eliminating fair lending risk in the auto lending arena would do no such thing. Instead, dealers would still have discretion when it comes to selecting a finance source for their customers.
Fifth Third Bancorp revealed in a regulatory filing this month that its indirect auto loan portfolio is being examined by the Department of Justice to determine whether the finance source engaged in discriminatory practices.
A lawyer with the CFPB’s Office of Enforcement made an impassioned plea before Congress yesterday, asking that the agency’s widespread discriminatory and retaliatory practices against its employees be curtailed.
Rep. Jeb Hensarling, on behalf of the House Financial Services Committee, released a video Monday calling on the CFPB to make its advisory council meetings open to the public.
Earlier this month, Evergreen Bank Group issued a statement about its decision to move to a flat fee pricing model. The move was in response to a low FDIC rating and alleged violations of the ECOA.
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