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DOJ Mystery-Shopped Md. Dealership Before Suing for Racial Bias

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There's a story like this every year or two, and just like this story they generally only discuss different outcomes by race.

 

While certainly inflammatory, the analysis generally avoids controlling for credit history, LTV, income, etc. (you know, the objective factors that determine loan pricing).

 

It's quite possible that the same dealer also gave less favorable terms to people who are allergic to cantaloupe, compared to people who are diabetic.  

 

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My neighbor says when they see him coming into the dealership they are thinking state Max int rate. He said one time he was going to purchase after sales negotiations were over they introduced him to the special finance guy without any knowledge of his credit situation. 

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Posted (edited)
2 hours ago, cv91915 said:

 

There's a story like this every year or two, and just like this story they generally only discuss different outcomes by race.

 

While certainly inflammatory, the analysis generally avoids controlling for credit history, LTV, income, etc. (you know, the objective factors that determine loan pricing).

 

It's quite possible that the same dealer also gave less favorable terms to people who are allergic to cantaloupe, compared to people who are diabetic.  

 

The filing says the test buyers sent to the dealerships had similar credit characteristics.   #17

https://www.justice.gov/opa/press-release/file/1205716/download

Edited by Allkindabroke

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35 minutes ago, Allkindabroke said:

The filing says the test buyers sent to the dealerships had similar credit characteristics.   #17

https://www.justice.gov/opa/press-release/file/1205716/download

That is not exactly what was alleged in paragraph 17.  No discussion of income or score is included.  The closest we get to dollars is how much was available FOR a down payment. 

 

Bottom line is that this was a BHPH lot that had a back-up of a sub-subprime Acceptance company (funny, I seem to recall mentioning in a different thread that companies with Acceptance in their name were rarely good options). 

 

On its face, Justice makes a seemingly prima facie case for bias, but there is still an assumption based upon facts NOT in evidence.  The Defendant's Original Answer may shed more light on the situation.  Also of note is that the government will have the obligation of demonstrating that the wife was, in fact, aware of the conduct of the alleged perpetrator.  

 

Also of note is that nobody trotted out appears to have signed a deal.  That complicates matters.  Government would have done better to identify a couple of hoopties almost identical in equipment, condition and price and then sent their undercovers in to actually consummate the deal.  THEN they have a figurative smoking gun, and leverage. 

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11 minutes ago, centex said:

That is not exactly what was alleged in paragraph 17.  No discussion of income or score is included.  The closest we get to dollars is how much was available FOR a down payment. 

 

Agreed.  I took the poster at his/her word about the content of the filing, but then I actually read it.

 

Nothing I saw in the article or the filing contains sufficient info to lead an objective person to the same conclusions as the author(s) of either.  

 

Neither mentions what care (if any) was taken to control the data sets for credit scores, credit history, LTV or income.  The filing has one vague statement and then launches into a litany of issues with down payments. 

 

Back to my point about the original story:  no one who reads it is going to pore through DoJ filings to determine if the allegations are supported by a single molecule of fact.

 

Of course none of my commentary means that the dealer ISN'T a scumbag.  

 

17. The testing undertaken by the United States revealed that Defendants’ actions, policies, and practices discriminate against applicants on the basis of race with respect to credit transactions in violation of the Equal Credit Opportunity Act, 15 U.S.C. § 1691(a)(1), by offering more favorable terms to white testers than to African American testers with similar credit characteristics, including, but not limited to:

  1. Down payment installments: White testers were offered the option to fund their down payments in two installments by paying what they had available that day and paying the remaining balance due within 14 or 30 days. In contrast, none of the African American testers were offered the option to pay the money they had available for a down payment that day and then to pay the remaining balance of their down payment at a future date, even though the African American testers had more money available to put down than the white testers ($1,200 instead of $1,100).

  2. Lower down payment amounts: In the tests involving CAC financing, all of the African American testers were told that they needed a higher down payment than the white testers were told for the same car (usually $2,000 instead of $1,500).

  3. Lower bi-weekly payments: In the test involving “buy here, pay here” financing, the African American tester was quoted bi-weekly payments that were higher than the white tester was quoted for the same car ($150 instead of $125).

  4. Other acts that discourage African American testers: Defendants told one 4

 

African American tester that he had to purchase a $1,700 warranty to obtain CAC financing, when no white tester was given this information; and Defendants told another African American tester that it would not be worth a credit inquiry to see if CAC would accept a $1,200 down payment since Mr. Chesgreen was 90% certain it would not be approved with a down payment under $2,000, but a white tester was told that Defendants could try a down payment of $1,100 on the same car and increase it to $1,500 only if necessary to secure CAC financing. See 15 U.S.C. § 1691e(g); 12 C.F.R. § 1002.4(b).

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56 minutes ago, centex said:

That is not exactly what was alleged in paragraph 17.  No discussion of income or score is included.  The closest we get to dollars is how much was available FOR a down payment. 

There is no "alleged"  I used the words" testers with similar credit characteristics"  which is directly from the filing.  

 "offering more favorable terms to white testers than to African American testers with similar credit characteristics"

 

 

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2 hours ago, cv91915 said:

Agreed.  I took the poster at his/her word about the content of the filing, but then I actually read it.

 

Nothing I saw in the article or the filing contains sufficient info to lead an objective person to the same conclusions as the author(s) of either.  

 

Neither mentions what care (if any) was taken to control the data sets for credit scores, credit history, LTV or income.  The filing has one vague statement and then launches into a litany of issues with down payments. 

 

 "offering more favorable terms to white testers than to African American testers with similar credit characteristics"

 

Is the phrase "similar credit characteristics" really not an indicator that someone at the DOJ factored credit into the equation before filing a lawsuit? Or do allegedly objective people just come to the conclusion that the attorney's for legal agencies don't anticipate counterarguments of the defendants when they file a case of this type?

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You are missing multiple facets here...not the least of which is that anyone can allege anything in a filing.  Proving it up is entirely different.  The Pleading is NOT evidence, even when the filer is the government.  Secondly, similar credit characteristics to ME necessarily includes discussions about scores, LTV and income.  That the government elected NOT to present that information suggests, on its face and to a reasonable juror, that this is NOT a case where the prospective purchasers are as equal as the government would like us to believe.

 

Something else I find interesting is that, without discussion of WHAT down payment was required, it may be that $1200 was what the dealership was asking for and since the black purchaser HAD that sum, there WAS NO NEED to offer a split down.  In other words...there are a whole lot of facts omitted by the filing that require clarity through the subsequent filings by both parties. 

 

Going off half-cocked places someone in the same category, IMO, as the insipid SJW's that babble about tweets from when someone was a pimply faced teen and who is now in college or in a professional career.  SOME of us prefer to let matters unfold and then evaluate on the merits once we know ALL of the relevant information...

 

As CV aptly notes...the dealership peeps may well be scum of the earth, but there are too many issues missing to allow for a pronouncement of bias with any degree of absolute certainty.

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54 minutes ago, centex said:

You are missing multiple facets here...not the least of which is that anyone can allege anything in a filing.  Proving it up is entirely different.  The Pleading is NOT evidence, even when the filer is the government.  Secondly, similar credit characteristics to ME necessarily includes discussions about scores, LTV and income.  That the government elected NOT to present that information suggests, on its face and to a reasonable juror, that this is NOT a case where the prospective purchasers are as equal as the government would like us to believe.

 

 

Agreed, plus these types of suits can be filed for political reasons, and it isn't uncommon for a defendant like this one to settle the matter (regardless of fault) rather than face the expense of a Federal trial and the associated negative media coverage. 

 

If the DoJ attorney who filed this had political motivations (no way to know either way), there would be no better method to kick off the exercise than with an inflammatory filing that's missing key facts that most people would never even notice.  

 

Clearly the author of the magazine article that started this discussion didn't push back for a lot of particulars.

 

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2 hours ago, cv91915 said:

If the DoJ attorney who filed this had political motivations

Knowing how things work around DC, I would answer "yes" to this question. It makes for a really nice headline in certain nationally distributed newspapers. Especially the one owned by the same person who founded a certain billion dollar online shopping company.

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I once had an F&I guy go on and on about how I should become a landlord since he has made so much money doing so as a side hustle. he said, out loud, the key to make money is don't rent to African Americans.

 

needless to say, I walked out on the deal.

 

this was not back in the 1980s or 1990s... it was this century. WTF??!!

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It is a common practice even to this day.     I could walk into any dealership, perform an audit and find the proof with a matter of a few hours.

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