WASHINGTON (Legal Newsline) — The Consumer Financial Protection Bureau has announced $80 million went out to consumers harmed by Ally Financial Inc. and Ally Bank’s alleged discriminatory auto loan pricing policies.
The CFPB, acting with the Department of Justice and pursuant to a federal court order, ordered Ally to pay $80 million in damages. Ally allegedly had a policy that allowed dealers to “mark up” consumers’ risk-based interest rates, then paid those dealers for the markups. The CFPB says the policy lacked proper controls or monitoring.
Because of this, the CFPB charged the policy resulted in higher loan prices for African-American, Hispanic, Asian and Pacific islander borrowers than similarly situated non-Hispanic white borrowers.
After the settlement, an Ally settlement administrator identified approximately 301,000 eligible, participating borrowers and co-borrowers who had been overcharged between April 2011 and December 2013 as a result of the alleged discriminatory markup policy. This represented an estimated 235,000 total loans.
In addition to the $80 million for consumers overcharged between April 2011 and December 2013, Ally recently paid approximately $38.9 million to consumers allegedly overcharged during the 2014 calendar year, the consumer board said.