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 guidance on fair lending law compliance for lenders working with dealerships to finance auto purchases.
Those who are looking to get a loan for a car can use this calculator to estimate your car payment and use the Loan Review HQ website to see the credibility of lenders and the transparency of their practices.
Ultimately, there are lots of different reasons why someone might need to take out a loan to purchase a car. Furthermore, understandably, owning a car comes with a number of unique benefits. From freedom of movement to the ability to secure a title loan, owning a car is a life step that the majority of people aim to complete. In case you were not aware, a title loan is a type of secured loan where borrowers can use their vehicle title as collateral. Consequently, if you would like to learn more about taking out a title loan, this guide to atlanta title loans might be useful.
Alternatively, there are ways to lease a car instead. It should be noted that there is a lot of legal understanding that needs to be considered first, a summary of which can be read here: https://www.swapalease.com/lease101/guide/chapters/lease-basics/.
Many Americans are unfortunately discriminated against when it comes to both of these factors, be it loans or leases, and so may seek to swap their lease or fight back against a falsely led decision. Speaking of, 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.
— ColorOfChange.org (@ColorOfChange) November 13, 2015
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:
- Van Jones, Congress says ‘OK’ to racist auto lenders, CNN.com, 16 Dec 2015.
- Brian J. O’Connor, Turkey of a bill ‘reforms’ car loans, Detroit News, 29 Nov. 2015.
- Anthony Pignataro, Rep. Tulsi Gabbard votes for controversial bill allowing racial discrimination in car buying, Maui Times, 25 Nov 2015.
- Stuart Rossman, The Data Is Clear: Auto Lenders Discriminate, US News & World Report, 17 Nov. 2015.
- Zach Carter, Dozens Of Democrats Are About To Vote For Racial Discrimination At Car Dealerships, The Huffington Post, 16 Nov. 2015.
- Tom McKay, Republican-Backed Bill Could Help Shady Auto Dealers Discriminate Against Minority Buyers, Mic, 12 Nov 2015
- María Peña, Entregan al Congreso 50 mil peticiones para proteger a compradores de autos, El Diario, 13 Nov. 2015.
- Jessica Lachenal, House GOP Moves To Allow Racist Car Dealerships To Continue Being Racist, Themarysue.com, 12 Nov. 2015.
- Cory Doctorow, House GOP Defends The Right Of Racist Car-Dealers To Overcharge People Of Color Boing Boing. 11 Nov. 2015.
- Cathy O’Neil, Republicans would let car dealers continue racist practices undeterred, MathBabe.org, 11 Nov. 2015.
- Congress Should be Ashamed of Push to Roll Back Discriminatory Protection in Auto Finance, Washington Informer, 14 Aug. 2015.
- Charlene Crowell, Campaign To Rollback Consumer Protection In Auto Financing, BlackPressUSA, 7 Aug. 2015.
- NYTimes Editorial Board, Putting An End To Abusive Car Loans, N.Y. Times, 13 Jun. 2015.
- Racial Disparities in Auto Loan Markups State-by-State (NCLC, June 2015)
- Facts are Facts: Auto Dealer Interest Rate Markups Cost Consumers (Center for Responsible Lending, May 2015)
- Reckless Driving: Implications of Subprime Auto Finance Growth (Center for Responsible Lending, January 2015)