Ally Paying $98M to Resolve US Auto-Loan Claims

Comments: 2  | Leave A Comment
  • advertisement
  • WASHINGTON (AP) — Ally Financial Inc. is paying $98 million to resolve U.S. government claims that minority borrowers were charged higher rates on its auto loans than whites with similar credit histories.

    The agreement announced Friday by the Justice Department and the Consumer Financial Protection Bureau is the government’s biggest auto-loan discrimination settlement to date.

    Ally is paying $80 million in damages to about 235,000 African-American, Hispanic and Asian and Pacific Islander borrowers, and $18 million in penalties. The higher rates were charged on auto loans between April 2011 and December 2013, according to the government.

    Detroit-based Ally is one of the largest indirect auto lenders in the U.S. Ally doesn’t make auto loans directly to consumers; it buys the loan contracts made by auto dealers. Ally sets an interest rate for the loans and allows dealers to charge customers a higher rate, or dealer markup.

    The government says the system gives Ally an incentive to allow auto dealers to charge higher markups. Ally failed to adequately monitor rate-setting by dealers, the government said.

    Ally says it sets rates based only on borrowers’ credit profiles and that it doesn’t practice or condone discrimination.

    Ally said in a statement that “based on the company’s analysis of its business, it does not believe that there is measurable discrimination by auto dealers.”

    At the same time, Ally said it takes the government’s allegations “very seriously” and has agreed to the settlement terms. The company said it expects to take a $98 million charge against fourth-quarter earnings for the settlement.

    1 2 Next page »

    Tags: » »

    • More Related Content


    2 thoughts on “Ally Paying $98M to Resolve US Auto-Loan Claims

    1. I’m not sure why but this website is loading
      incredibly slow for me. Is anyone else having this issue or
      is it a issue on my end? I’ll check back later and see if the problem still

    2. Start working from home! Great job for students, stay-at-home moms or anyone needing an extra income… You only need a computer and a reliable internet connection… Make $90 hourly and up to $12000 a month by following link at the bottom and signing up… You can have your first check by the end of this week…

      Sign up here>


    Add Your Comment

    Fill in your details below or click an icon to log in: Logo

    You are commenting using your account. Log Out / Change )

    Twitter picture

    You are commenting using your Twitter account. Log Out / Change )

    Facebook photo

    You are commenting using your Facebook account. Log Out / Change )

    Google+ photo

    You are commenting using your Google+ account. Log Out / Change )

    Connecting to %s