Reports have shown Blacks and Latinos have been historically discriminated against when filing for loans, and the Obama administration is cracking down on lenders to make sure it does not continue to happen and is providing consumers with information they need to spot the warning signs of discrimination.
In a letter to lenders on Wednesday, the Consumer Financial Protection Bureau (CFPB) said it will strictly enforce laws against discriminatory lending practices. The consumer watchdog agency also said it will attack subtle forms of discrimination that result from lender policies.
“We want consumers to avoid the marketplace’s silent pickpocket — discrimination,” said CFPB Director Richard Cordray. “We cannot afford to tolerate practices, intentional or not, that unlawfully price out or cut off segments of the population from the credit markets.”
The CFPB plans to monitor financial institutions to ensure policies of consumer credit products including auto loans, mortgages, credit cards, student loans and more are not violated. The bureau will also enforce consumers' rights under the Equal Credit Opportunity Act, which bars lenders from basing their credit decisions on race, color, religion, sex or marital status.
Credit discrimination often happens behind closed doors, making it difficult to detect. To protect yourself, the bureau offers the following warning signs:
−You are treated differently in person than on the phone.
−You are discouraged from applying for credit.
−You hear the lender make negative comments about race, national origin, sex and other protected groups.
−You are refused credit even though you qualify for it.
−You are offered credit with a higher rate than the one you applied for, even though you qualify for the lower rate.
−You are denied credit, but not given a reason why or told how to find out why.
−Your deal sounds too good to be true.
−You feel pushed or pressured to sign.
If any of these have occurred, or you believe you are the victim of discriminatory lending practices, file a complaint with the bureau by visiting consumerfinance.gov, or by calling their complaint line at (855) 411-CFPB (2372).
The Consumer Financial Protection Bureau was created after the financial crisis to help protect consumers from loans and other services with high and deceiving fees. For more information on the agency, visit here.
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(Photo: Sacramento Bee/MCT/Landov)