An inside look from one banking CEO in how his bank was attacked by the Obama regulators.
The banking industry faced a horrid attack of unnecessary regulations from the Dodd-Frank law. What many never saw was the behind the scenes shakedowns.
Read the whole post here via the New York Post. Below are some paragraphs:
The former CEO of Ally Financial Inc. says the Obama administration abused its power by holding the bank’s business hostage in order to coerce a record settlement of “trumped-up” racism charges and push profit-killing new regulations on the entire auto-lending industry.
The huge $100 million deal has spooked several other major lenders into resolving similar race-bias charges and offering below-market rates to minorities for car loans.
Since the 2013 deal, the Consumer Financial Protection Bureau has accused the industry’s biggest lenders of ripping off black and other minority customers by charging them higher interest rates than whites.
“They were using us as a way to regulate the industry,” he said. And it may be working. Several of the nation’s biggest lenders, including most recently Toyota Motor Credit, Fifth Third Bank and American Honda Finance, have agreed to cap interest rates, and a handful of smaller banks have agreed to adopt flat fees.
A confidential CFPB memo detailing how the agency would go after Ally strongly confirms the strategy. The October 2013 document says being able to roll the financial giant would “send an important message” to the entire auto-finance industry to “eliminate discretionary pricing” — or face similar discrimination charges