he Consumer Financial Protection Bureau (CFPB) recently announced two different suits against Fifth Third Bank. The CFPB has found some of the company’s practices to be unlawful, and this decision may impact you -- here’s a closer look.
The CFPB found that Fifth Third Bank issued loans with higher dealer rates to minorities regardless of a person’s personal credit. The bureau found that the bank issued these rates mostly to people of Hispanic and African American origin. The U.S. District Court only allows dealers to issue markups of 1% to 1.25% even though Fifth Third has been issuing markups to minorities that reach up to 2.5%.
As a result of the CFPB’s findings, Fifth Third will pay a total of $12 million in settlement funds to Hispanic and African American borrowers that gained a loan through the company between the dates of January 2010 and September 2015. Funds will be distributed to victims over the next few months. The CFPB has also filed an action against Fifth Third Bank for illegal credit card practices.
Credit Card Illegalities
It has been found that Fifth Third added credit card products to loans and that these products were added deceptively. For this illegality, Fifth Third will pay a total of $3 million to consumers impacted in addition to paying a hefty $500,000 penalty. Again, victims will be contacted and compensated accordingly.
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