Biased Loans by Auto Dealers to Bring Bank Suits by CFPB
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U.S. banks may be sued by the Consumer Financial Protection Bureau if they fund discriminatory vehicle loans made by auto dealers, according to new guidance released by the agency.
Banks are legally liable for unfair lending under the Equal Credit Opportunity Act of 1974, the CFPB said yesterday in a statement. The fact that the improper decisions may be made by auto dealers -- who are exempt from consumer bureau oversight -- doesn’t absolve lenders of responsibility for resulting racial disparities, the agency said.