A year and a half after the Ally Financial settlement, the Consumer Financial Protection Bureau disclosed more detailed plans for sending out checks to individual consumers from an $80 million restitution fund.
Ally, the CFPB and the U.S. Department of Justice reached a consent order in December 2013, to settle discrimination charges from the CFPB and the U.S. Department of Justice. In addition to restitution, Ally also paid a civil penalty of $18 million.
Patrice Ficklin, CFPB assistant director for fair lending and equal opportunity, said in a recent blog post that Ally is paying Philadelphia-based Heffler Claims Group to serve as administrator for the settlement fund. The administrator is expected to mail packages to borrowers “over the next weeks,” she said, spelling out how consumers can apply for refunds.
The consent order is controversial because of the CFPB’s use of the disparate impact theory to establish discrimination, and because the CFPB’s critics say the statistical method the CFPB uses to identify members of protected classes is unreliable.
Auto lenders aren’t allowed to collect data on race or ethnicity, so the CFPB relies on names and addresses to assign a likelihood whether a consumer belongs to a protected class. Ally agreed to the consent order, but denied that it tolerated discrimination in its dealer network.
Ally reiterated that denial written statement last week. Ally also said it wasn’t responsible for the long delay in paying out the settlement. “Ally has also acted with speed and best efforts to comply with the Consent Orders and provide the CFPB and DOJ the information they required for customer remuneration,” the company said.
The CFPB said a total of 235,000 borrowers who are African-American, Hispanic, Asian, or Pacific Islander and who obtained an auto loan from Ally between April 1, 2011, and Dec. 31, 2013, may be eligible for payments from the fund.