Case: United States v. Ally Financial Inc. and Ally Bank

2:13-cv-15180 | U.S. District Court for the Eastern District of Michigan

Filed Date: Dec. 20, 2013

Closed Date: 2017

Clearinghouse coding complete

Case Summary

On December 20, 2013, the Consumer Finance Protection Bureau and the United States Department of Justice filed this lawsuit in the U.S. District Court for the Eastern District of Michigan against a bank, alleging that it engaged in discriminatory lending practices. The plaintiffs alleged that, as a result of the defendant's policies and practices, African-American, Asian/Pacific Islander, and Hispanic borrowers unfairly paid higher prices for their automobile loans than non-Hispanic White borro…

On December 20, 2013, the Consumer Finance Protection Bureau and the United States Department of Justice filed this lawsuit in the U.S. District Court for the Eastern District of Michigan against a bank, alleging that it engaged in discriminatory lending practices. The plaintiffs alleged that, as a result of the defendant's policies and practices, African-American, Asian/Pacific Islander, and Hispanic borrowers unfairly paid higher prices for their automobile loans than non-Hispanic White borrowers. The complaint asked the court for a declaratory judgment, injunctive relief and monetary damages.

Specifically, the plaintiffs alleged that the defendant allowed its automobile dealers to set wholesale loan prices unrelated to credit risk characteristics and loan terms. The defendant did not require automobile dealers to justify or document the reasons for the amount of broker fees and prices set above the par rate; failed to monitor for disparities based on race or national original because of its policies and practices; and created a financial incentive for automobile dealers to charge higher fees and interest rates.

The plaintiffs filed a proposed consent order that was entered by the Court (Magistrate Judge Mark A. Randon) on December 23, 2013. Under the consent order, the defendant agreed to implement policies and procedures designed to ensure that the dealer markup on automobile retail installment contracts was negotiated in a nondiscriminatory manner. In addition, the defendant would compensate certain African-American, Hispanic, and Asian/Pacific Islander borrowers through the establishment of an $80 million dollar settlement fund.

The consent order was to remain in effect dependent on defendant compliance - essentially 2 years if the defendants were in compliance, or 3 years if they were not. On August 2, 2017, the court dismissed the case with prejudice, finding the consent decree completed.

Summary Authors

Megan Richardson (3/11/2014)

Related Cases

United States v. Compass Bank, Northern District of Alabama (2007)

People


Judge(s)

Randon, Mark (Michigan)

Tarnow, Arthur J. (Michigan)

Attorneys(s) for Plaintiff

Holder, Eric H. Jr. (District of Columbia)

Levy, Judith Ellen (Michigan)

McQuade, Barbara L. (Michigan)

Montag, Coty R (District of Columbia)

Mosteller, Daniel P. (District of Columbia)

Rosenbaum, Steven H. (District of Columbia)

Samuels, Jocelyn (District of Columbia)

Attorneys(s) for Defendant

Benton, Hu A. (Utah)

Judge(s)

Randon, Mark (Michigan)

Tarnow, Arthur J. (Michigan)

Attorneys(s) for Plaintiff

Holder, Eric H. Jr. (District of Columbia)

Levy, Judith Ellen (Michigan)

McQuade, Barbara L. (Michigan)

Montag, Coty R (District of Columbia)

Mosteller, Daniel P. (District of Columbia)

Rosenbaum, Steven H. (District of Columbia)

Samuels, Jocelyn (District of Columbia)

Attorneys(s) for Defendant

Benton, Hu A. (Utah)

Devine, Timothy A. (Michigan)

Neaton, Robert A. (Michigan)

Documents in the Clearinghouse

Document

Docket [PACER]

United States v. Ally Financial Inc. and Ally Bank

Dec. 23, 2013 Docket
1

Complaint

Dec. 20, 2013 Complaint
5

Consent Order [Granting Injunctive Relief]

United States of America v. Ally Financial

Dec. 23, 2013 Order/Opinion

Docket

Last updated May 11, 2022, 8 p.m.

ECF Number Description Date Link
1

COMPLAINT filed by United States of America against All Defendants. Plaintiff requests summons issued. No Fee Required − US Government. County of 1st Defendant: Wayne. [Previously dismissed case: No] [Possible companion case(s): None] (Levy, Judith) (Entered: 12/20/2013)

Dec. 20, 2013
2

SUMMONS Issued for *Ally Bank* (TMcg) (Entered: 12/20/2013)

Dec. 20, 2013
3

SUMMONS Issued for *Ally Financial Inc.* (TMcg) (Entered: 12/20/2013)

Dec. 20, 2013

A United States Magistrate Judge of this Court is available to conduct all proceedings in this civil action in accordance with 28 U.S.C. 636c and FRCP 73. The Notice, Consent, and Reference of a Civil Action to a Magistrate Judge form is available for download at http://www.mied.uscourts.gov (TMcg) (Entered: 12/20/2013)

Dec. 20, 2013
4

NOTICE of Appearance by Timothy A. Devine on behalf of All Defendants. (Devine, Timothy) (Entered: 12/23/2013)

Dec. 23, 2013
5

CONSENT ORDER ADMINISTRATIVELY CLOSING CASE. The Court shall retain jurisdiction for the duration of this Consent Order to enforce its terms, after which the case shall be dismissed with prejudice. Signed by District Judge Arthur

Dec. 23, 2013

State / Territory: Michigan

Case Type(s):

Fair Housing/Lending/Insurance

Key Dates

Filing Date: Dec. 20, 2013

Closing Date: 2017

Case Ongoing: No

Plaintiffs

Plaintiff Description:

Plaintiff is the Consumer Financial Protection Bureau, the United States Attorney's Office in the Eastern District of Michigan, and the United States Department of Justice Civil Rights Division Housing and Civil Enforcement Section.

Plaintiff Type(s):

U.S. Dept of Justice plaintiff

Attorney Organizations:

U.S. Dept. of Justice Civil Rights Division

Public Interest Lawyer: Yes

Filed Pro Se: No

Class Action Sought: No

Class Action Outcome: Not sought

Defendants

Ally Financial Inc. and Ally Bank, Private Entity/Person

Defendant Type(s):

Bank or credit provider

Case Details

Causes of Action:

Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691

Availably Documents:

Trial Court Docket

Complaint (any)

Monetary Relief

Injunctive (or Injunctive-like) Relief

Outcome

Prevailing Party: Plaintiff

Nature of Relief:

Injunction / Injunctive-like Settlement

Damages

Source of Relief:

Settlement

Form of Settlement:

Court Approved Settlement or Consent Decree

Amount Defendant Pays: $80,000,000.00

Order Duration: 2013 - 2017

Content of Injunction:

Develop anti-discrimination policy

Monitoring

Issues

General:

Predatory lending

Discrimination-area:

Lending

Discrimination-basis:

National origin discrimination

Race discrimination

Race:

Asian/Pacific Islander

Black

National Origin/Ethnicity:

Hispanic