Trump Defangs CFPBs Fair Lending Unit That Targeted Auto Lenders
William Hoffman
February 2, 2018
The White House is stripping enforcement power from the Consumer Financial Protection Bureau’s Office of Fair Lending and Equal Opportunity, which has been the chief driver of discrimination lawsuits in the auto finance space.
Employees in the fair lending unit have been moved into the office of the director, will no longer have enforcement capabilities, and will be focused on “advocacy, coordination, and education,” Acting Director Mick Mulvaney said in a letter to employees this week.
The office pursued payouts from many auto lenders who were accused of charging minorities and protected communities higher interest rates than their Caucasian counterparts with equal credit standing.
The industry has long argued that these enforcement actions under former Director Richard Cordray’s leadership were an overreach because lenders do not see race and ethnicity information on loan applications. However, the CFPB had argued that lenders allowed dealers to markup fees too high, and that policy resulted in unintentional discrimination under the Equal Credit Opportunity Act. It’s unclear at this time what the bureau’s new guidance on dealer markup is following this change as a spokesman was not able to respond to AFN by press time.
Consumer and civil rights groups argue that these actions weaken protections for consumers.
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more: https://www.autofinancenews.net/trump-defangs-cfpbs-fair-lending-unit-that-targeted-auto-lenders/
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