FTC signs deals waiving fair-lending obligations for two auto dealers
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The Federal Trade Commission signed agreements with two auto dealers and a former general manager that release them from court-ordered fair-lending obligations. Arizona Attorney General Kris Mayes, coplaintiff in one case, called the move 'outrageous' and said it greenlights discrimination against Arizonans. The Northern District of Illinois said it was never given the opportunity to evaluate one of the agreements.
Key Facts
- The FTC said its prior accusations were based on statistical analyses designed to show disparate-impact liability, a theory the agency will no longer enforce.
- Passport received multiple letters from a financial institution notifying it of disparities in markup rates charged to Black borrowers, the FTC alleged.
- Coulter Motor Company and Gregory DePaola, a former general manager at the Phoenix-area dealer, were accused of charging Latino customers more in interest and add-on products in violation of the federal Equal Credit Opportunity Act.
- DePaola signed one of the new agreements; attorneys for Passport and Coulter did not respond to requests for comment.
The Agreements
The Federal Trade Commission announced deals with two auto dealers and a former general manager of a third. The agency said it would not enforce, or help enforce, court-ordered obligations to maintain fair lending programs and avoid unlawful credit discrimination. The Northern District of Illinois, which presided over one case, said it was never given the opportunity to evaluate one of the new agreements. DePaola, the former general manager at Coulter Motor Company, signed one of the new agreements.
Discrimination Allegations
The FTC previously accused all three defendants of charging people of color more in discretionary markups and add-on fees on average compared to white borrowers. In the Passport case, the FTC alleged a financial institution sent the chain multiple letters notifying it of disparities in markup rates charged Black borrowers. Coulter Motor Company and Gregory DePaola, a former general manager at the Phoenix-area dealer, were accused of charging Latino customers more in interest and for add-on products, in violation of the federal Equal Credit Opportunity Act. The FTC said its past accusations were based on statistical analyses designed to show disparate-impact liability, and the agency will no longer enforce those types of claims.
State and Court Reactions
Arizona Attorney General Kris Mayes, whose office was a coplaintiff in one of the affected cases, called the move 'outrageous'. Mayes said she found it 'appalling' that the FTC would backtrack on the settlement and treat its state partners this way, essentially greenlighting discrimination against Arizonans. Attorneys for Passport declined to comment on the agreement. Coulter and an attorney that represented both Coulter and DePaola in the 2024 settlement did not respond to requests for comment.
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FTC signs deals waiving fair-lending obligations for two auto dealers
