Will Congress Endorse Discrimination in Auto Lending?

If you’re a person of color taking out a car loan, odds are you’ll pay a significantly higher interest rate than you would if you were white. Since 2013, the Consumer Bureau has begun to tackle this long-neglected, well-documented problem, both through enforcement and by issuing a guidance on fair lending law compliance for lenders working with dealerships to finance auto purchases. Congress should be praising the Bureau for its fight against auto-loan discrimination. Instead, a shameful number of members of the House voted last month to curtail the CFPB’s work in this area.

On November 18, the House passed a bill, H.R. 1737, which would invalidate the existing guidance and impose burdensome and unnecessary new procedures on any future CFPB efforts to address the issue. The final vote was 332-96, with 88 Democrats voting in favor.

AFR and our allies will do all we can to keep this bad bill from gaining traction in the Senate or being added as a policy rider to a year-end spending measure. Thus far, over 52,000 Americans have signed petitions urging Congress to reject HR 1737. (You can add your name to AFR’s petition here). And ColorOfChange, Working Families, Center for Popular Democracy and Americans for Financial Reform (AFR) delivered over 50,000 of those petitions to the offices of House Majority Leader Paul Ryan, Minority Leader Nancy Pelosi, and Representative G.K. Butterfield, chair of the Congressional Black Caucus.

On November 16th, 66 consumer rights, civil rights and advocacy groups also delivered a letter opposing H.R. 1737 and urging members of Congress to vote ‘no.’ The Leadership Conference on Civil and Human Rights and 23 other civil rights groups have also written a strong letter of opposition to the bill. And the Congressional Progressive Caucus wrote a Dear Colleague urging opposition to the bill.

Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights, released the following statement in advance of a House vote on H.R. 1737:

“Discrimination undermines the civil rights of all Americans, whether in in voting rights, access to quality schools, or racial profiling by law enforcement. Lending discrimination is no different. When lenders redlined Black residents out of homeownership or gouged them on mortgages, we passed laws like the Fair Housing Act. But the vestiges of lending discrimination remain alive and well in the auto industry. We cannot allow auto lenders to charge Black borrowers more than Whites simply because of their skin color. A vote in support of this bill is a vote to ignore lending discrimination.”

For further background on how auto lenders charge minorities higher rates, see these past reports and news stories:

News:

Reports:

 

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