Update on Discrimination and Unfairness – The FTC’s Case Against Passport Automotive Group

| 9 min

In late September, we blogged about a lawsuit that the Chamber of Commerce and other business groups filed against the CFPB, challenging the CFPB’s update to its Supervision and Examinations Manual. As updated, the manual now states that discrimination is an unfair” practice under the Dodd-Frank Act, and that the agency plans to scrutinize it across the board in consumer finance,” including in situations where fair lending laws may not apply.” We noted in our blogpost that the FTC and the State AGs were also sending signals that they planned to challenge discrimination using their unfairness authority.

Well, the FTC just did. On October 18, it announced a settlement with Passport Automotive Group resolving allegations (among other charges) that Passport engaged in an unfair practice when it imposed higher costs on Black and Latino customers than on similarly situated non-Latino White customers. The vote was 4-1, with Commissioner Phillips dissenting and Commissioner Wilson concurring in part and dissenting in part.