Republicans Pass Bill Allowing Auto Lenders, Insurers To Openly Discriminate Against Racial Minorities, Gays

Republicans Make It Easier To Discriminate
Against Racial Minorities, Gays
The prospect of computer hackers taking control of your car is only the latest of the undue risks of car ownership.

There are also undue financial risks.

Prominent among them is predatory and discriminatory auto lending, specifically abusive interest rate markups targeted on racial minorities.

On Wednesday, the House Financial Services Committee passed a bill that, if enacted, would roll back efforts by the Consumer Financial Protection Bureau to stop predation and discrimination in car loans. The bill would nullify auto-loan guidelines issued by the bureau in 2013 that spelled out lenders’ obligations and liability under federal lending law. It would also require the bureau to go through a cumbersome process whenever it issued future auto-lending guidelines for nonbank auto lenders — including finance companies that are owned by carmakers — which make up a huge part of the auto-loan market.

Republican-dominated House committees routinely pass awful bills that please their corporate constituents but go nowhere. The committee vote on this bill, however, was 47 to 10, with 13 Democrats joining all of the Republican members in voting yes. Overall, the bill has 124 co-sponsors, including 55 Democrats. The level of support reflects the power of auto dealers, who are often among the most prominent businesspeople in any given congressional district and who do not want scrutiny of their lending practices.

The bill’s supporters say it would make needed changes to regulatory procedures. What it really would do is condone overcharging and discrimination in auto lending.

Another risk drivers face is being charged more for car insurance because they are not married, despite the flimsiness of the alleged connection between marriage and safe driving.

Research issued this week by the Consumer Federation of America compared the premiums charged by six major insurers in 10 cities by marital status – single, single with child, separated, divorced, widowed, domestic partner and married. Some findings:

Only State Farm did not vary its rates based on marital status.

Among the others — Farmers, Geico, Liberty, Nationwide and Progressive — rates were almost always higher for unmarried drivers than for married ones. Among those five, however, only Geico was found to charge different prices depending on whether an unmarried driver had never been married, was separated or divorced.

In several cities, Geico and Progressive charged domestic partners more than married drivers....

"I used to wonder why there aren't laws requiring lenders to spell out their terms in simple English. Now I understand. Our economy - according to Congress - depends on companies being able to mislead people into paying more they need to, whether for a car, house, insurance, etc. 

People worry about the "nanny" state doing too much to protect people. What they really should worry about is the government protecting predatory businesses - at our expense."

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