Bank to pay $21M for charges of discrimination, deception
WASHINGTON (9/29/15)--The Consumer Financial Protection Bureau (CFPB) Monday announced two separate actions against Fifth Third Bank. One charged the bank with discriminatory auto loan pricing, the other with illegal credit card practices.
The auto loan action was taking jointly by the CFPB and with the U.S. Department of Justice. It requires Fifth Third to change its pricing and compensation system to minimize the risks of discrimination, and to pay $18 million to harmed African-American and Hispanic borrowers.
The CFPB said in a release that Fifth Third violated the Equal Credit Opportunity Act by charging African-American and Hispanic borrowers higher dealer markups for their auto loans than non-Hispanic white borrowers. These markups, it charged, were without regard to the creditworthiness of the borrowers.
The CFPB’s action against Fifth Third’s deceptive marketing of credit card add-on products requires the bank to provide an estimated $3 million in relief to eligible harmed consumers and pay a $500,000 penalty.
Fifth Third Bank is a regional bank and insured depository institution. It is headquartered in Cincinnati, Ohio.