Federal regulators reached an $18 million settlement with Fifth Third Bancorp on Monday over allegations that the lender’s pricing policies resulted in minority borrowers paying more on their car loans, the Wall Street Journal reported today. The Consumer Financial Protection Bureau and the Justice Department claim that a portion of the annual percentage rate charged to African-American and Hispanic borrowers on Fifth Third loans was higher than the amount white borrowers were charged between 2010 and the first quarter of 2014. Fifth Third agreed to change its pricing, lowering its maximum markup cap to 1.25 percentage points. Regulators determined that African-American borrowers from Fifth Third were charged approximately 0.35 percentage points more in dealer markups than white borrowers, resulting in $200 more in interest payments on average over the life of the loan, according to the consent order.
