Remember (how could you forget?) the mortgage collapse brought to us by the likes of Barney Frank due to his and others demands banks end "discriminatory" home lending policies, i.e., give loans to people who were totally unqualified to have them?
Are we now due to see a repeat in the auto industry?
"U.S. banks may be sued by the Consumer Financial Protection Bureau if they fund discriminatory vehicle loans made by auto dealers, according to new guidance released by the agency.
Banks are legally liable for unfair lending under the Equal Credit Opportunity Act of 1974, the CFPB said yesterday in a statement. The fact that the improper decisions may be made by auto dealers -- who are exempt from consumer bureau oversight -- doesn’t absolve lenders of responsibility for resulting racial disparities, the agency said.
“We cannot afford to tolerate practices, intentional or not, that unlawfully price out or exclude whole segments of the population from the credit markets,” Richard Cordray, the agency’s director, said today in a Washington speech."
In addition to creating another possible lending meltdown similar to that seen earlier in mortgages, this represents a broad and intrusive extension of CFPB power.
http://www.businessweek.com/news/2013-03-21/banks-to-be-held-liable-for-biased-auto-loans-under-cfpb-rules
