Ally Bank To Pay $98 Million For Charging Higher Interest To Non-White Borrowers

Consumerist ^ | December 20, 2013

[SMGFan]

Earlier today, the Justice Dept. and the Consumer Financial Protection Bureau announced the largest auto loan discrimination settlement in U.S. history with the news that Ally Bank has agreed to pay $98 million, including $80 million in refunds to settle allegations that it has been charging higher interest rates to minority borrowers of car loans.

[SMGFan]

Ally formerly GMAC- General Motors Acceptance Corporation

[SMGFan]

Sorry but is Ally Financial & Bank related?

[SMGFan]

Yes it is a subsidiary ... answering my own question. Its is late ..

[dalereed]

the same

[Extremely Extreme Extremist]

This is nothing but a shakedown, Chicago/Alinsky politics at its worst.

[Responsibility2nd]

It might be proven that those customers had lower credit scores which result in higher interest rates. But no matter, they are a protected class and banks are forced to give them lower rates regardless.

[GeronL]

liberal corporation probably too, check their donations

[Pearls Before Swine]

Ummmm... were the research results adjusted for credit scoring?

[guyfromjrz]

JPM recently shelled out 9,000,000,000 USD. SunTrust. Paid 500,000,000 in fines, and set aside another 500,000,000 for reworking loans they made; for a total of 1,000,000,000. Both banks announced the settlements with DOJ the same day or so a couple of weeks ago.

[Gay State Conservative]

This is nothing but a shakedown, Chicago/Alinsky politics at its worst.

Exactly.If it's possible to smile...even for a millsecond...in the deepest part of hell Saul Alinsky surely smiles upon hearing this.

[RetiredTexasVet]

You mean they would dare to charge EBT Sharkista more than an employed Jill or Joan?

[informavoracious]

I have never seen a credit application that asked my race. They are only interested in my credit score and ability to pay.

[Mears]

I’m surprised to see Asians included in this-——they usually aren’t.

All the ones in my area have money and are too smart to be cheated.

.

[ConservativeMind]

I seem to recall that Ally was a virtual, internet-only bank. I can't how race could be a part of it unless they let auto dealers make their loans and the auto dealers could choose to press harder on certain minorities to get themselves a greater commission. That is the most obvious thing I can make out.

[dragnet2]

had lower credit scores which result in higher interest rates.

Odd, those with less money, those who've hit hard times and their credit scores took a hit, are charged more.

Would it not make more sense to just lend them less and give them a break on these loan shark interest rates? It seems charging those on the lower ends of the ladder higher interest rates is down right punitive.

I'll be called anti-capitalist, but its my opinion what the banks, credit cards companies and lenders charge for loans and interest rates is criminally obscene.

[HereInTheHeartland]

Credit scores are statistically correlated with race.

[arthurus]

Charging higher interest for people with higher risk financial and/or employment profiles will play out as race discrimination. So now we are going to set up another “bubble,” this time in auto purchases? or is the government determined to bankrupt the auto lenders? Auto loan derivatives- trillions and trillions of dollars worth of auto loan derivatives. Are personal loans and hock shops next?

[TurboZamboni]

not giving a loan to someone who can’t pay it back=redlining

giving a loan to someone who can’t pay it back=predatory lending

[17th Miss Regt]

Uh, no. That would have completely ruined the story!

[Insigne123]

This is going to be a severe blow to all the Buick dealerships