With auto loans, CFPB takes new tack in battling markups

05/16/2013 | AmericanBanker.com (free registration)

The Consumer Financial Protection Bureau's decision to pursue enforcement actions against banks when auto dealers charge higher rates to minority borrowers is a different strategy from the one Congress used to halt mortgage interest rate markups. Congress banned the incentives that mortgage brokers received when directing borrowers to higher-rate loans. The CFPB's approach is faster and reflects its lack of authority over dealers and reluctance to issue outright bans, experts say.

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