CFPB, DOJ Eye Captives in Disparate Impact Probe
The Consumer Financial Protection Bureau and the Department of Justice are probing the lending operations of some of the nation’s largest captive finance companies for possible lending discrimination, according to a Bloomberg report.
The report cited a Sept. 13 regulatory filing by Toyota Motor Credit Corp. and an Aug. 19 filing by American Honda Finance Corp. that said the federal agencies sought information related to possible violations of the 1974 Equal Credit Opportunity Act, which bars discriminatory lending. AHFC’s filing added that enforcement action is possible: “Although neither the CFPB nor the U.S. Department of Justice has alleged any wrongdoing on our part, we cannot predict the outcome of the inquiry.”
As many as five other captives have received similar requests for data that may be related to borrowers’ racial backgrounds, according to Bloomberg. A CFPB spokesman declined to comment on the investigation.
In February, at least four banks were told by the CFPB that they may be sued over seemingly discriminatory vehicle loans and interest-rate markups from auto dealers.
