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.

Megan Richardson - 03/11/2014
- 12/01/2018


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