For years consumer lawyers were telling authorities that banks were working with car dealers to fleece minority buyers, fleece them by charging minority group buyers more for interest than non-minority buyers.  Ally Financial was tagged to pay $98 million in a settlement regarding overcharges in 2013.  (Don’t feel bad for Ally, they got $16 BILLION in the bailout.) 

The way this worked is that lenders gave dealers flexibility in determining the “sell rate” on an auto loan they originated, with a fixed “buy rate” charged by the bank.  Some unscrupulous dealers used this as a tool to charge buyers of color (and others they determined were gullible) higher interest rates than they would otherwise qualify for and higher rates than others with similar credit were paying for the same loans.  The CFPB was installing a system with a “fixed reserve” so that dealers would up-charge by a standard amount for each loan. 

According to Auto News, even ahead of a formal change in policy, lenders are reinstating flexible margins on their loans, thereby making it open season on consumers again.