The CFPB wants to protect
car buyers from discrimination.
Congress wants to stop it.
Car dealers charge Black and Latino customers up to $300 more than their white customers with comparable credit ratings.1
This is the finding from an investigation carried out by the Consumer Financial Protection Bureau (CFPB) and the Department of Justice. These two agencies found that car dealers are two times as likely to charge higher interest on car loans for buyers of color than for white buyers, regardless of credit history. This extra interest is pure profit for car dealers. And while the CFPB can’t regulate auto dealers, it does have the power to regulate the lenders who do business with them by enforcing the Equal Credit Opportunity Act. Now the CFPB is taking action to ensure that these lenders are put on notice that this kind of discrimination is against the law.
Because of these CFPB notices, car dealers who want to continue discriminating against Black and Brown people are organizing their lobbyists to wage an attack on the regulatory agency. A bill that just recently passed the U.S. House Finance Committee would interfere with the CFPB's ability to communicate existing law to financing companies that work with car dealerships--and both Democrats and Republicans voted YES on it.2
So much is at stake. Car loans are the third biggest source of household debt in the U.S., and 80 percent of the car loans in our country are made through dealerships.3,4 Discriminatory loan markups by car dealerships affect working families who rely on their cars to get to work each day. And with these families already facing systemic discrimination by the lending industry at large, having to pay more for a car loan puts their financial health at further risk. That is why we're teaming up with Working Families to urge Congress to stop backing discriminatory car loan interest rates.
U.S. representatives from both sides of the aisle need to hear from us so that they know the public is watching.Tell Congress to vote no on HR 1737 and let the CFPB do its job.
It takes less than a minute to join this fight against lending discrimination. Will you sign our petition?
Thanks and Peace,
Rashad, Arisha, Brandi, Brittaney, Evan and the rest of the ColorOfChange team.
1. “CFPB and DOJ Reach Resolution with Honda to Address Discriminatory Auto Loan Pricing,” Consumer Financial Protection Bureau, 07-14-2015
2. “H.R.1737 - Reforming CFPB Indirect Auto Financing Guidance Act,” Congress.gov, 07-29-2015
3. “CFPB Takes Action Against Fifth Third Bank for Auto-Lending Discrimination and Illegal Credit Card Practices,” Consumer Financial Protection Bureau, 09-28-2015
4. “Dealer Fees for Arranging Car Loans Are Drawing Scrutiny From U.S.,” New York Times, 11-22-2013