Consumer advocates have hailed recent legal settlements limiting undisclosed surcharges on loans that auto dealers arrange for customers. The suits alleged the dealers profited disproportionately from surcharges on black and Hispanic customers.
But some lenders say the settlements may forestall elimination of the surcharges by validating the overall concept. Consumer advocates favor a flat, disclosed fee on each loan, which presumably would eliminate discrimination as well.
The latest settlements, with four lenders including Bank of America Corp., received preliminary approval Tuesday from a federal judge in U.S. District Court in Nashville, Tenn.
The lenders agreed to cap the amount of the surcharge that dealers can add to loans, and to require that dealers tell customers clearly that a surcharge may be included in the price of the loan. But lenders will not require dealers to disclose the amount of any surcharges.
For this complete story, please visit Settlements Likely Won’t End Auto Finance Markups.
