Monday, February 10, 2014

GMC's bank busted for racism, what was GMAC now has a new name, and was found guilty of ripping off minorities

In an investigation of lending practices in the year after April 2011, the government agencies determined that Ally Financial and Ally Bank charged roughly 235,000 Asian/Pacific Islander, Black and Hispanic borrowers higher interest rates than their credit profiles warranted and higher rates than whites were charged in equivalent situations. The result was that those borrowers paid $200 to $300 more in total interest for the loan.

Ally Financial has agreed to pay a $98-million fine to settle an investigation into unfair lending practices overseen by the Justice Department and the Consumer Financial Protection Bureau (CFPB).

The C.F.P.B. found that Ally “had not made sufficient efforts to ensure that it was complying with fair lending laws in its pricing of indirect auto loans,” Richard Cordray, the director of the C.F.P.B.

Those payments came in the form of “dealer markups,” or the percent that car dealerships can charge to arrange loans through banks like Ally.

Ally Financial Inc. was founded in 1919 as the General Motors Acceptance Corporation (GMAC), a provider of financing to automotive customers.

GMAC sold a majority stake to Cerebrus in 2006, the investment group that bought Chrysler, and in 2009 they changed the name to Ally Bank, then in 2010 Ally Financial