Auto loan borrowers can face a number of challenges when seeking funding for the vehicles they want to buy. One of those challenges is navigating all of the paperwork and making sure that forms are filled out correctly. Another is making sure that eligibility requirements are met so that the processing of loan applications can be done expediently. One thing that everyone can agree to is that discriminatory practices should not be a part of the process, though they were alleged to be in a recent business litigation case.
In the case, it was alleged that higher interest rates were charged for loans on trucks and cars. This was said to have happened in cases where the higher rates would be viewed as discriminatory. Correspondingly, the Department of Justice and the Consumer Financial Protection Bureau ordered a bank and a financial services company to pay $80 million to the borrowers involved, plus $18 million in penalties.
Both companies are under the same corporate umbrella. In a statement, the corporation said that it does not engage in discriminatory practices. It also said that according to an analysis of the affected companies, there did not seem to be measurable discrimination. The statement clearly affirmed that the evaluation process for auto installment contracts does not include any information about ethnicity or race.
Still, in compliance with the order from the CFPB and DoJ, the corporation is taking positive steps forward. These include monitoring dealer markups to prevent discrimination. In some cases, it will even mean eliminating those markups.
This particular case is a complex one, with a lot of facets to consider. Other business litigation cases may be equally complex, or may be on a smaller scale. Regardless of any case's size, those involved should seek highly qualified attorneys to represent them.
Source: Detroit Free Press, "Ally pays $98 million to settle auto loan bias charge" Susan Tompor, Dec. 20, 2013
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