What happened
On December 20, 2013, the Consumer Financial Protection Bureau and the Justice Department ordered Ally Financial and Ally Bank to pay $80 million into a fund for African-American, Hispanic, and Asian/Pacific Islander borrowers and $18 million to the CFPB’s civil-penalty fund. The agencies determined that more than 235,000 minority borrowers paid higher dealer markups than similarly situated white borrowers on Ally-funded auto loans from April 2011 through December 2013. They called it the largest federal auto-loan discrimination settlement to that date. DOJ filed in the Eastern District of Michigan.
Reuters reported the same $98 million total and said Ally was accused of causing those borrowers to pay about $200 to $300 more on their loans. The order required monitoring of markups or a shift away from discretionary dealer markups. That is an ECOA consent-order package, not a verdict from a jury.
The Cookout read
Concern. Who pays more to drive off the lot is a bread-and-butter civil-rights question. The agencies put a number on it and made Ally pay borrowers back. Restitution is not generosity. This file will not relabel $80 million in ordered damages as a racial-equity donation.