Posted on 09/29/2015 2:27:21 AM PDT by bob_denard
Fifth Third Bank will pay $18 million to settle federal allegations that it discriminated against thousands of black and Hispanic borrowers by charging them a higher interest rate for auto loans than white customers, federal regulators said Monday.
The Cincinnati-based bank agreed to pay $3 million to credit card customers, as well as a $500,000 penalty, to resolve a separate case over debt protection coverage that regulators said was deceptively marketed.
Fifth Third spokesman Larry Magnesen said the bank, which has 17 branches in Pittsburgh, was “pleased to put both of these matters behind us” and maintained that it treated its customers fairly.
Regulators did not say whether any affected customers were from Pittsburgh.
“Fifth Third stands firm in its conviction that we have treated and will continue to treat our customers in a fair, open and honest manner,” Magnesen wrote in a statement addressing the auto loan allegations.
“Fifth Third strongly opposes any type of discrimination and has, for many years, monitored for and taken steps to avoid any potential discrimination in its auto finance business, as well as all other areas in which we interact with consumers.”
The auto loans involved interest-rate markups that were added by dealers who acted as middlemen for the bank. The dealers charged an interest rate between January 2010 and September 2015 that
resulted in minority borrowers paying an average of $200 more on a loan than white borrowers, the Consumer Financial Protection Bureau said.
The higher rates were not based on the creditworthiness of the borrowers, the CFPB said.
The bureau and Department of Justice began investigating Fifth Third's auto lending business in January 2013 as part of a larger crackdown on discriminatory lending practices in the industry. In July, Honda was required to pay $24 million in consumer restitution.
(Excerpt) Read more at triblive.com ...
There is higher risk in general when dealing with loans made to minorities on the loans being repaid. Also on the incidence of fraud. Anybody in the lending industry knows this. But of course we can’t be honest about it because of PC.
Not all borrowers are the same.
Anyone know where the bank’s name came from?
The Bank of the Ohio Valley was bought out in the late 1800s by the Third National Bank. In the 1900s the Third National Bank and the Fifth National Bank merged, and it was called the "Fifth Third Bank."
Also branches in NC around Lake Norman area.
I’ve had them for years.
and this money goes where? into the Rainbow coalition’s pockets?
Good thing they didn't call it the Third Fifth Bank, because that would be racist.
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