A Government of Thugs and Extortionists

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In 2013, The Consumer Financial Protection Bureau launched an anti-discrimination crusade against banks in the auto loan business based not on specific complaints by consumers, but on “half-baked” statistics, according to a story in the New York Post.


In fact, there were no complaints related to discriminatory practices in auto loans filed with the Bureau at all.  Instead, the CFPB issued summary judgments extorting and shaking down banks in an effort to achieve “racial justice.”

Newly uncovered internal memos reveal the Obama administration knowingly exaggerated charges of racial discrimination in probes of Ally Bank and other defendants in the $900 billion car-lending business as part of a “racial justice” campaign that’s looking more like a massive government extortion and shakedown operation.

So far, Obama’s Consumer Financial Protection Bureau has reached more than $220 million in settlements with several auto lenders since the agency launched its anti-discrimination crusade against the industry in 2013. Several other banks are under active investigation.

That’s despite the fact that the CFPB had no actual complaints of racial discrimination — it was all just based on half-baked statistics.

A confidential 23-page internal report detailing CFPB’s strategy for going after lenders shows why these companies are forking over millions of dollars in restitution and fines to the government despite denying any wrongdoing.

The high-level memo, sent by top CFPB civil-rights prosecutors to the bureau’s director and revealed by a House committee, admits their methods for proving discrimination were seriously flawed from the start and had little chance of holding up in court. Yet they figured they could muscle Ally, as well as future defendants, with threats and intimidation.

“Some of the claims being made in this case present issues, such as use of [race] proxying and reliance on the disparate-impact doctrine, that would pose litigation risks meriting serious consideration prior to taking administrative action or filing suit in district court,” the Oct. 7, 2013, memo addressed to CFPB chief Richard Cordray acknowledges.

“Nevertheless,” it added, “Ally may have a powerful incentive to settle the entire matter quickly without engaging in protracted litigation.”


They sound just like mafiosos plotting to extort money, don’t they?

How about some threats to go with the extortion?

At the time, the Detroit-based bank was seeking permission from the Federal Reserve to remain a financial holding company. Without regulatory approval, Ally risked losing key business lines, primarily its insurance subsidiaries.

“Protracted litigation” would present “a high hurdle” to Ally retaining such status, the CFPB lawyers conspired.

“Nice bank ya got there, Ally.  Be a shame if anything were to happen to it.”

Prosecutors also sought to use the Community Reinvestment Act as leverage against Ally. At the time, the FDIC was reviewing the bank’s compliance with the anti- redlining law.

They huddled with FDIC and Federal Reserve officials to get them on board with their scheme; and the Fed assured them it would look favorably upon “a prompt and robust” settlement by Ally, while the FDIC confirmed that a quick resolution would help Ally pass its CRA exam.

Can you imagine private citizens or companies conspiring like this to extort cash from a bank?  The Fed and the FDIC would be indicted as conspirators.

It’s amazing to see separate government entities cooperating to wring money from a bank that is very likely innocent of any discriminatory practices but forced to pay tens of millions of dollars to the government so it can continue to do business.


Government by thuggery is what we get when “social justice” is enforced.


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