Ally Financial Inc. disclosed this week in a regulatory filing that the Consumer Financial Protection Bureau (CFPB) is increasing its scrutiny over its auto lending practices. The agency has notified Ally that it had not taken adequate steps to prevent auto dealers from violating laws against lending bias, according to the filing.
Ally already had confirmed that the CFPB was investigating its retail-financing practices and had warned that auto lenders will be held responsible for certain dealership practices. Ally could face penalties and business-practice changes because of the probe.
In its filing, Ally said the CFPB staff "believe we have an obligation to prevent independent automotive dealers with which we do business from engaging in certain retail-financing practices that the CFPB believes violate the antidiscrimination provisions of the Equal Credit Opportunity Act, and that we have failed to fulfill this obligation." Earlier this year, the CFPB told lenders to better ensure that car loans comply with laws that prohibit discrimination against minorities and women. The CFPB is focusing on a practice in which auto dealers mark up interest rates charged on loans to consumers.