At least four banks are being investigated for possible discrimination against certain new-car buyers by unfairly marking up interest rates on their car loans. According to a Bloomberg report in late February, the Consumer Financial Protection Bureau, or CFPB, was looking into discriminatory practices on car loans. Since the initial report, Ally Financial has said in a government filing that it is being investigated by the CFPB for some of its retail financing practices.
The CFPB was established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Among the federal agency's duties are to write rules and enforce federal consumer protection laws as well as to investigate consumer complaints of unfair, deceptive or abusive acts or practices among companies that provide all types of consumer financial products or services, including new- and used-car loans.
Parts of the law have been contested by the banking industry. But when it originally was written, auto dealers were excluded from the oversight of the CFPB. However, banks weren't, and the CFPB has been fielding complaints about auto loans from banking institutions.
Do you have a car loan from the bank? Do you think you were treated fairly?
Tara Baukus Mello writes the cars blog as well as the weekly Driving for Dollars column, providing both practical financial advice for consumers as well as insight into the latest developments in the automotive world. Follow her on Facebook here or on Twitter @SheDrives.