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Welcome back to HFN Streaming, where we’re all about empowering you to make informed financial decisions. Today, let’s talk about a topic that often gets overlooked when you’re in the market for a new car: interest rate discrimination in auto loans. While many of us are busy comparing makes, models, and sticker prices, there’s a hidden issue that could cost you more in the long run. Studies have shown that minority borrowers, particularly African American and Latino communities, often face higher interest rates than their non-minority peers with similar credit scores. This practice, known as “auto lending discrimination” or “auto redlining,” is not just unethical—it’s illegal.

High-Profile Cases: The Good, The Bad, and The Ugly

Ally Financial (2013)

The Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) set a precedent by ordering Ally Financial to pay a staggering $98 million. Why? For charging African American and Latino borrowers higher interest rates on auto loans compared to their non-Hispanic white counterparts.

Honda Financial Services (2015)

Honda Financial Services also found themselves in hot water when they were ordered to pay $24 million for discriminatory interest rates in auto loans.

Toyota Financial Services (2016)

Toyota Financial Services had to cough up $21.9 million to settle allegations that they charged higher interest rates to African American and Asian/Pacific Islander customers compared to non-Hispanic white customers.

Just the Tip of the Iceberg

It’s crucial to realize that these high-profile cases are merely the ones that have come to light. Many other instances of auto lending discrimination have been quietly settled, and the penalties may have been renegotiated behind closed doors.

Final Thoughts

Interest rate discrimination in auto loans is a real issue that needs our attention. While some companies have been held accountable, the practice is far from eradicated. As consumers, and especially as African American women, we must be vigilant and well-informed to protect ourselves from these discriminatory practices.

So, the next time you’re in the market for a new car, remember: it’s not just about the make, model, or price. Your interest rate matters too, and being aware of this form of discrimination is your first line of defense.

Stay empowered and financially savvy, ladies!