“We don’t discriminate,” he told attendees at the Auto Finance Compliance Summit this month in his first extended public comments since the settlement. “We don’t stand for people who discriminate.”
Soto insisted that Ally did nothing wrong. In impassioned comments during a panel discussion at the Compliance Summit, Soto said Ally will continue to offer dealers discretionary compensation because the company does not believe it produces disparate impact, regardless of the settlement.
“We did what we believe is right,” he said, in a deliberate tone. “We will continue to do whatever we can to find disparate impact. If there was an easy way, it would have been found.”
Soto, a former FDIC regulator, said the settlement put a strain on Ally and on him personally.
“What we went through in December — forget the dollars — it is what we stand for” that came under attack through the settlement, he said. “I came through that period beaten, because it is what we stand for.”
The comments offered a stark admission from a senior Ally official. Soto maintained that Ally “settled for other reasons,” and indeed the understanding is that regulators, whether explicitly or not, exacted the settlement by leveraging the threat of regulatory turbulence through Ally’s bank regulators. Ally has a bank holding company charter.
Of course, this is a part of the story that not only will no one discuss, but is nearly impossible to prove, even if they did. However, Soto’s comments at the Compliance Summit indicate that, as a former regulator, he was not convinced that Ally deserved to be sanctioned.
In announcing the settlement, the CFPB indicated that Ally’s wrongdoing was evidenced in disparate impact on protected classes of borrowers of as little as 20 basis points.