Congresswoman Debbie Wasserman Schultz Votes To Allow Car Dealers And Auto Finance Companies To Discriminate Against Minorities
Congresswoman Debbie Wasserman Schultz pushed through Congress a bill that would allow auto finance companies to discriminate against minority and unsophisticated car buyers.
The Reforming CFPB Indirect Auto Financing Guidance Act would let lenders and dealers ignore CFPB rules. Current CFPB rules bar auto finance companies from charging excessive interest and fees on car loans.
The National Automobile Dealers Association is also pushing this bill. They realized their members could easily widen their profit margins by adding stealth fees and charging higher interest rates. Most unsophisticated minority consumers don’t read the fine print. They are just happy they can own a new car.
Brian O’Connor at the Detroit News points out that the bill is:
The auto finance company sets a minimum interest rate on car loan made through a dealer. The dealer can then hike the interest rate to 2.5 percentage points or more. The lender would kick in back-end points equaling 1% to 3% to the dealer. This is also similar to what used to be called Yield Spread Premiums in lending.
NADA and Wasserman Schultz endorse what is really ghetto loans for cars.
Brian O’Connor from the Detroit News points out: