|

Ally Financial Inc will pay $98 million for auto loan discrimination

By Funke Oyelade,

Ally Financial Inc., a bank and auto financing institution has agreed to pay $98 million because of auto financing discrimination.

Reuters reported that the institution was discriminatory in giving loans for cars. It charged minority borrowers higher interest rates than their white counterparts.

This one was done to 230,000 African-Americans, Hispanics, Asian and Asian Pacific Islander borrowers, who had to pay $200-300 more on their loans. Instead of making rates on credit score, the dealers made them based on race or national origin.

CNN reported the Justice Department and the Consumer Financial Protection Bureau investigated Ally Financial and discovered its discriminatory practices which went back as far as April of 2011.

The bank will pay an $18 million penalty and $80 million will go to the minorities charged higher interest loans. The people will be contacted by the agency and will not have to apply for relief.

The Director of the Federal Consumer Protection agency, Richard Cordray emphasized why the $80 was going to particular consumers, “We are returning $80 million to hard-working consumers who paid more for their cars or trucks based on their race or national origin."

Photo courtesy of Wikimedia Commons.

 
 

Join Our Newsletter

Popular Threads