U.S. Mulls Suing Auto Lenders

The U.S. Consumer Financial Protection Bureau has notified at least four banks that it may sue them for discriminatory practices involving interest rates on auto loans, Bloomberg News reports.

The news service, which cites unidentified sources, says the CFPB is focusing on so-called "dealer markups," the incrementally higher borrowing rate that auto retailers charge customers for arranging financing from banks.

The agency sent letters to the lenders last week saying they had 15 days to explain financing that appears to violate the Equal Credit Opportunity Act, according to Bloomberg.

The CFPB declines to comment on the letters. But the bureau tells the news service that historically dealer markups have hurt non-white car buyers more than whites.

The 2010 law that created the CFPB excluded auto dealers from the agency's authority. Analysts say pursuing lenders is the bureau's only way to police car loans.