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Thread: Latest Bank Fined for Racist Auto Loan Program

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    Default Latest Bank Fined for Racist Auto Loan Program

    Fifth Third Bank is far from the only financial institution investigated for racial discrimination related to auto loans. Ally Bank, American Honda Financial and Evergreen Bank have also violated the Equal Credit Protection Act. Racial discrimination in this lending sector now amounts to roughly $194 million. And given that race-based income inequality remains a pressing problem both in and out of the U.S., it’s particularly appalling that financial institutions choose to profit off of Blacks and Latinos, groups still recovering from the 2007 economic recession.

    “Even when African-American and Latino borrowers negotiate the interest rate, they end up paying more for their cars than white borrowers with similar credit profiles because of the car dealer interest rate markup,” said Chris Kukla, senior vice president of the Center for Responsible Lending. “Discrimination has no place in the auto lending market, and our research shows that dealer markups contribute to this discriminatory outcome. … The best way to root out discrimination in auto lending would be to eliminate dealer markups altogether.”

    http://www.cleveland.com/business/in...riminated.html
    “What a caterpillar calls the end of the world we call a butterfly.” - ECKHART TOLLE

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    Default Re: Latest Bank Fined for Racist Auto Loan Program

    Go in wearing white makeup, dress 'white', and come in with white person = problem solved. They trick you then trick them back cause it's eye for an eye hoe (the racists being the hoes)! just playing but really though, don't do business at racist places/with racist people.
    “Cook for him like a housewife, fuck him good like a nympho….pay the rent and the car note, he invests in me like crypto”

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    Default Re: Latest Bank Fined for Racist Auto Loan Program

    Quote Originally Posted by miss.a.p1600 View Post
    Go in wearing white makeup, dress 'white', and come in with white person = problem solved. They trick you then trick them back cause it's eye for an eye hoe (the racists being the hoes)! just playing but really though, don't do business at racist places/with racist people.
    Ummmm are you having a dizzy spell? Trolling?
    “What a caterpillar calls the end of the world we call a butterfly.” - ECKHART TOLLE

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    Default Re: Latest Bank Fined for Racist Auto Loan Program

    Lol! No not trolling. Maybe I've watched too much chapelle though. Just saying this type of news sucks to hear people acting racist in business but really what can you do to solve the problem??? Me personally I didn't have the need for an auto loan but if I did, I would go somewhere with quality service and brush up on negotiation skills. If I get any kind of vibe people are acting racists, I'm out! Their loss! And if I found out they were discriminating and costing me money, I'd sue to recoup lost funds and expenses.

    You can look at things with comedy/humor, you can ignore racist people to find many more non racists, you can get involved in government and help change/create new laws, you can take your business elsewhere etc.

    Now that it's been discovered they have to pay that money back. It just goes to show you racist never win.
    “Cook for him like a housewife, fuck him good like a nympho….pay the rent and the car note, he invests in me like crypto”

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    Default Re: Latest Bank Fined for Racist Auto Loan Program

    FWIW, I don't think Miss.a.p is trolling, just angry and venting a little. As for fooling the banks, my last car purchase was done online. Ford was offering some sweet 0% interest for four years deal on Fusion Hybrids. So, I did the whole financing deal plus all the purchase negotiations online with my local Ford dealer. I filled out the loan app online and was approved for the car loan. I never check the box when anyone asks my race or ethnicity, so Ford Motor Credit had no idea my race. That offers a means of avoiding racial scams. Of course, the car dealer, being a car dealer had to try and sell me something when I got there to pick up the car. I just flirted with the F&I guy a little and then told him there'd be no adds to the deal. I was a take it or leave it customer. Got the deal done in less than half an hour and the dealership threw in a gas card. Amazing what a little cleavage and playing with a button will do. ;-)

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    Default Re: Latest Bank Fined for Racist Auto Loan Program

    Quote Originally Posted by Optimist View Post
    “… The best way to root out discrimination in auto lending would be to eliminate dealer markups altogether.”

    http://www.cleveland.com/business/in...riminated.html
    And everyone can drive Yugos.

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    Default Re: Latest Bank Fined for Racist Auto Loan Program

    You know how to dbl the value of a Yugo? Fill it up w/gas.


    MANY MEN WANTED TO LAY ME DOWN, BUT FEW WANTED TO LIFT ME UP

    -Eartha Kitt

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    Post Re: Latest Bank Fined for Racist Auto Loan Program

    Quote Originally Posted by whirlerz View Post
    You know how to dbl the value of a Yugo? Fill it up w/gas.
    Great one, and now, last time I looked gas was $2.15

    Where is the symbol for ROTFL

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    Default Re: Latest Bank Fined for Racist Auto Loan Program

    Quote Originally Posted by slowpoke View Post
    Great one, and now, last time I looked gas was $2.15

    Where is the symbol for ROTFL
    You have to hit Go Advanced, & then click on more under the smilies.


    MANY MEN WANTED TO LAY ME DOWN, BUT FEW WANTED TO LIFT ME UP

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    Default Re: Latest Bank Fined for Racist Auto Loan Program

    I'm not so naïve as to believe that institutional racism exists, but I also think some of this is due to the relatively higher rate of financial illiteracy within minority communities, which hampers individual minorities from negotiating the best financial terms for themselves. BTW, one of my banks is Fifth Third Bank and the branches I visit within the City of Detroit are filled with minority lending officers, which leads me to believe that the issue really has more to do with financial illiteracy than institutional racism. However, I could be wrong.

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    Default Re: Latest Bank Fined for Racist Auto Loan Program

    Quote Originally Posted by Danny Ocean View Post
    I'm not so naïve as to believe that institutional racism exists, but I also think some of this is due to the relatively higher rate of financial illiteracy within minority communities, which hampers individual minorities from negotiating the best financial terms for themselves. BTW, one of my banks is Fifth Third Bank and the branches I visit within the City of Detroit are filled with minority lending officers, which leads me to believe that the issue really has more to do with financial illiteracy than institutional racism. However, I could be wrong.
    because of course ground floor lending officers create official bank policy


    Fifth Third Bank discriminated against black and Hispanic consumers by charging some higher interest rates on auto loans with no justification related to credit-worthiness

    and are being compelled to provide compensation by the government for doing so. this is an objective fact

    it's fucking baffling to me that peeps here are twisting themselves into knots striving to name/blame everything except for what actually occurred

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    Default Re: Latest Bank Fined for Racist Auto Loan Program

    Actually, if you read the article, Fifth Third Bank didn't originate the loans with the borrowers. It was the car dealers who originated the loans. After closing these loans, these loans were packaged together and sold off to banks such as Fifth Third Bank. In other words, assuming arguendo that there was any discriminatory practice, it was the car dealers who are at fault and not Fifth Third Bank. My sense is that Fifth Third Bank decided it was less expensive to fight the Feds and simply decided to pay a token fine while agreeing to do something their lending officers probably already practice, which is to not engage in any prohibited discrimination. Some will call this justice, I view at as nothing more than a federal government shakedown to transfer money from the haves to the have nots while generating a few headlines to keep folks stoked up against the banks.

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    Default Re: Latest Bank Fined for Racist Auto Loan Program

    I agree with a lot of what Danny said. This involved an auto dealership program where dealers were allowed a certain amount of latitude in marking up the auto loans in order to increase their cut for originating the loans. Fifth Third Bank loan officers, retail branches and direct lending policies were not implicated in any of this. In fact, Fifth Third Bank didn't even have any racial information on these people. - the CFPB conducted its analysis using last names and residence information. I'm guessing that a lot of these loans were originated by car dealerships in or near minority neighborhoods and that these dealerships, as Danny surmised, relied upon the financial illiteracy of their customer bases to get away with attaching higher interest rate loans to the cars that they sold.

    Now having said all of that, Fifth Third Bank's markup policies certainly created an environment where such a wide disparity of interest rates, among people with similar credit profiles, was possible. I'm also not naive enough to believe that someone at Fifth Third Bank, at the very least the person overseeing the third party auto loan origination program, was completely unaware of how the markup policies were playing out in practice.

    Now could Fifth Third Bank have fought this? Possibly. But for a bank of that size, I agree with Danny that $18 million and a few negative headlines were a small price to pay to get the CFPB off its back. For anyone who doesn't really follow financial services regulatory issues, the Dodd-Frank Act gives the CFPB some sweeping powers. No big bank is going to go toe to toe with the Bureau if they can get out cheap, which was the case here.

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    Default Re: Latest Bank Fined for Racist Auto Loan Program

    Quote Originally Posted by Danny Ocean View Post
    ...assuming arguendo...
    Ohhhh Latin. Well more correctly, law Latin. Meaning: for purposes of the argument. "Assuming arguendo" is redundant.

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