Auto lenders, beware: Government encourages guesswork
More trouble lies ahead for lenders trying to stay away from risky borrowers: The federal government wants to force auto lenders to guess the race, ethnicity and gender of potential borrowers and adjust interest rates accordingly.
It’s a proposal from the Consumer Financial Protection Bureau[5], a creation of the Dodd-Frank Act. The idea is to make sure “protected classes” get the same interest rates as others.
“Put bluntly, they want lenders to profile you,” based on your name and address, Rep. John Campbell[6], a Republican from California, wrote in an op-ed piece[7] Monday in The Wall Street Journal[8]. “Does that mean a person named Jefferson who lives in the Bronx is to be presumed an African-American, but not a Jefferson in Wichita?”
Recall that last week Mariner Kemper[9], chairman and CEO of UMB Financial Corp., warned of a “deterioration in terms,” including a push for mortgage loans with no down payment and the Obama administration’s push to lower other lending standards as well.
Shoptalk, Banking, Economic development
References
- ^ Greg Edwards (feeds.bizjournals.com)
- ^ This email address is being protected from spambots. You need JavaScript enabled to view it. (feeds.bizjournals.com)
- ^ Twitter (twitter.com)
- ^ Facebook (www.facebook.com)
- ^ Consumer Financial Protection Bureau (www.bizjournals.com)
- ^ John Campbell (feeds.bizjournals.com)
- ^ op-ed piece (stream.wsj.com)
- ^ The Wall Street Journal (www.bizjournals.com)
- ^ Mariner Kemper (feeds.bizjournals.com)