, Columnist
CFPB Proves Its Critics Right
The CFPB is determined to root out discrimination in auto lending, whether it exists or not.
OK, maybe not "no" worries.
Photographer: Scott Olson/Getty ImagesThis article is for subscribers only.
Car dealers sometimes make discounts, at their discretion, on loans they help to arrange with financial companies. That's a pretty fundamental aspect of how they do business. Yet the federal government is trying to put a stop to it.
The Consumer Financial Protection Bureau, an independent agency established by the Dodd-Frank financial-regulation law in 2010, says that letting the dealers exercise discretion opens the door to discrimination based on race and sex (whether or not that discrimination is intentional). So it's leaning on lenders to eliminate or at least limit that discretion and come up with "a different mechanism" for compensating dealers.