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The Consumer Financial Protection Bureau said DriveTime, which also has a lending unit, harassed delinquent borrowers and reported incorrect credit data.
November 19 -
Santander Consumer USA, Ally Financial and Capital One are among the companies facing scrutiny over their loans to borrowers with low credit scores.
November 4 -
WASHINGTON Consumer Financial Protection Bureau Director Richard Cordray praised BMO Harris Bank on Wednesday for becoming the first indirect auto lender to switch to a flat-fee structure, limiting the amount of discretion that dealers have to price finance loans.
April 30 -
The Detroit car lender is defying regulatory pressure to change its pricing system, but it's unclear whether other lenders will dig in their heels, too, or eventually give in.
February 7
The Justice Department and the Consumer Financial Protection Bureau are alleging that Toyota Motor Credit engaged in practices that resulted in discriminatory pricing of loans, according to a securities filing by the company.
In a recent letter to the Japanese automaker's finance arm, the two government agencies said they are prepared to start an enforcement proceeding unless Toyota Motor Credit voluntary satisfies their concerns, a document filed Friday with the Securities and Exchange Commission states.
More specifically, Justice and the CFPB "have indicated that they are seeking monetary relief and implementation of changes to our discretionary pricing practices and policies, which could adversely affect our business," the document says. "We intend to continue to cooperate with the agencies to reach a mutually satisfactory resolution."
The letter from the agencies represents the latest salvo in the Obama administration's fight against so-called discretionary markups, which allow auto dealers to raise the borrower's interest rate above the level where the lender approved the loan.
Critics of discretionary markups say they result in minority borrowers paying higher prices for auto loans. Auto lenders, including both banks and the finance arms of auto manufacturers, fear that auto dealers will abandon them if they ditch the practice unilaterally.
Toyota Motor Credit had previously disclosed that it received a request from the government for information about its auto finance business. But last week's developments represent an escalation of the matter.
Fifth Third Bancorp and Honda's finance arm
In December 2013, the CFPB reached a $98 million settlement with Ally Financial over the alleged discriminatory impact of the company's pricing practices. But despite pressure to abandon discretionary markups, Ally
In April, BMO Harris announced that it was switching to a flat-fee pricing structure, in
Discretionary markups are just one area in which auto lenders are facing scrutiny from regulators. The Justice Department, the SEC and the New York District Attorney's Office
