Op-Ed
Car Dealers Charge Exorbitant Interest Rates
By Charlene Crowell
NNPA Columnist
Car lending is on the rise, and rising with it is a hidden, unfair, abusive and discriminatory practice: car dealer interest rate markups. Surveys show that at least two-thirds of Americans have no idea it happens.
A decade ago, the largest auto finance companies settled landmark cases alleging discrimination in auto lending. Recent enforcement actions suggest that discrimination and unfairness still exist in the auto lending market.
Since 80 percent of the cars financed in the U.S. are financed through the dealer, this hidden practice is a huge threat to consumers.
Just this week, Honda Finance Corporation (HFC) agreed to pay $24 million in restitution to borrowers of color as a part of a settlement with the Consumer Financial Protection Bureau (CFPB) and Department of Justice (DOJ), after investigators discovered HFC’s policy to allow dealers to mark up the interest rate resulted in borrowers of color paying more in interest than White borrowers.
Unfortunately, Honda’s discriminatory auto practices are not an isolated incident.
An earlier settlement that CFPB and DOJ’ reached with Ally Bank, in which Ally agreed to pay $98 million in civil penalties and restitution, to settle claims of discrimination. Black, Latino and Asian American car buyers who financed with Ally paid more in interest on their loans than similarly situated White borrowers because of car dealer interest rate markups.
In September, CFPB revealed that several lenders agreed to pay more than $50 million in fines and restitution because supervisory examinations revealed issues of discrimination. And, a recent settlement between the DOJ and Evergreen Bank found similar disparities in Evergreen’s motorcycle lending portfolio, also attributable to dealer interest rate markups.
Consumer advocates welcomed the enforcement actions but cautioned that more work still needs to be done.
“We continue to believe that the only effective way to completely eliminate the discriminatory impact and the unfairness of hidden dealer interest rate markups is to end the practice altogether,” said Chris Kukla, CRL Senior Vice President. “This is a step in the right direction and we urge the CFPB and DOJ to continue pursuing the remaining cases.”
Kukla continued, “However dealer interest rate markups remain an unfair and hidden practice with continued potential for discrimination. CFPB and DOJ must vigilantly monitor the data for discriminatory or unfair impact and act swiftly if and when that impact occurs.”
For the moment, however, Richard Cordray, CFPB’s director will mark the progress made as the journey towards fair lending continues.
“Honda’s proactive decision to move to a new pricing and compensation system demonstrates industry leadership and represents a significant step towards protecting consumers from discrimination,” observed Cordray.
Dealer interest rate mark-up is the practice of adding extra interest to a consumer’s loan–dealers pocket this difference as compensation.
How does it work in practice?
A borrower qualifies for a loan at 5 percent, but the dealer raises it by as much as 2.5 percent more. The dealer tells the consumer, “Great news! We got you a great rate of 7.5 percent!” The dealer then collects a large bonus payment, up to a thousand dollars or more, when it sells the loan to a lender. The borrower gets stuck with higher car payments for the life of the loan.
Research, court cases and enforcement actions have shown that consumers of color have their loans marked-up more often, and by a greater amount, than White borrowers with similar credit profiles. Data from a series of court cases settled a decade ago found that African American and Latino borrowers were twice as likely to be hit with a dealer interest rate markup, and that markup was on average twice as large as for a similarly-situated white borrower. Those lenders agreed to cap the amount of markup dealers could add to the interest rate for 10 years, and those agreements have all expired.
Additional CRL research showed that for borrowers of color, following the auto dealers’ own advice on avoiding paying too much in markup does work. Car dealers insist that the interest rate is also negotiable, and that if consumers negotiate the rate like they do the price of the car the threat of overcharge disappears.
CRL data refutes that. According to a CRL-sponsored survey, borrowers of color reported attempting to negotiate the interest rate as much, if not more often, than white borrowers, and yet paid higher interest rates than similarly situated white borrowers. In fact, borrowers of color who negotiated the interest rate paid more than White borrower who did not negotiate.
Media accounts suggest that the CFPB and DOJ are working on several more cases alleging discrimination, and other bank regulators are also referring cases to the DOJ. A host of other enforcement agencies have also launched investigations into auto lending, including whether dealer markups have a discriminatory impact. A similar practice was banned in the mortgage market; it is long past time to end the same practice in the auto lending market.
Even though every forward stride deserves its own acknowledgement, the car lending market still lacks transparency and fairness for many consumers. Dealer interest rate markups are unfair and discriminatory, and we should not tolerate hidden fees that result in unfairness and discrimination in any financial marketplace.
Here’s hoping that car sales will soon be more broadly and fairly transacted for everyone.
Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at Charlene.crowell@responsiblelending.org.
###
Activism
Juneteenth: Celebrating Our History, Honoring Our Shared Spaces
It’s been empowering to watch Juneteenth blossom into a widely celebrated holiday, filled with vibrant outdoor events like cookouts, festivals, parades, and more. It’s inspiring to see the community embrace our history—showing up in droves to celebrate freedom, a freedom delayed for some enslaved Americans more than two years after the Emancipation Proclamation was signed.

By Wayne Wilson, Public Affairs Campaign Manager, Caltrans
Juneteenth marks an important moment in our shared history—a time to reflect on the legacy of our ancestors who, even in the face of injustice, chose freedom, unity, and community over fear, anger, and hopelessness. We honor their resilience and the paths they paved so future generations can continue to walk with pride.
It’s been empowering to watch Juneteenth blossom into a widely celebrated holiday, filled with vibrant outdoor events like cookouts, festivals, parades, and more. It’s inspiring to see the community embrace our history—showing up in droves to celebrate freedom, a freedom delayed for some enslaved Americans more than two years after the Emancipation Proclamation was signed.
As we head into the weekend full of festivities and summer celebrations, I want to offer a friendly reminder about who is not invited to the cookout: litter.
At Clean California, we believe the places where we gather—parks, parade routes, street corners, and church lots—should reflect the pride and beauty of the people who fill them. Our mission is to restore and beautify public spaces, transforming areas impacted by trash and neglect into spaces that reflect the strength and spirit of the communities who use them.
Too often, after the music fades and the grills cool, our public spaces are left littered with trash. Just as our ancestors took pride in their communities, we honor their legacy when we clean up after ourselves, teach our children to do the same, and care for our shared spaces.
Small acts can inspire big change. Since 2021, Clean California and its partners have collected and removed over 2.9 million cubic yards of litter. We did this by partnering with local nonprofits and community organizations to organize grassroots cleanup events and beautification projects across California.
Now, we invite all California communities to continue the incredible momentum and take the pledge toward building a cleaner community through our Clean California Community Designation Program. This recognizes cities and neighborhoods committed to long-term cleanliness and civic pride.
This Juneteenth, let’s not only celebrate our history—but also contribute to its legacy. By picking up after ourselves and by leaving no litter behind after celebrations, we have an opportunity to honor our past and shape a cleaner, safer, more vibrant future.
Visit CleanCA.com to learn more about Clean California.
Activism
OPINION: California’s Legislature Has the Wrong Prescription for the Affordability Crisis — Gov. Newsom’s Plan Hits the Mark
Last month, Gov. Newsom included measures in his budget that would encourage greater transparency, accountability, and affordability across the prescription drug supply chain. His plan would deliver real relief to struggling Californians. It would also help expose the hidden markups and practices by big drug companies that push the prices of prescription drugs higher and higher. The legislature should follow the Governor’s lead and embrace sensible, fair regulations that will not raise the cost of medications.

By Rev. Dr. Lawrence E. VanHook
As a pastor and East Bay resident, I see firsthand how my community struggles with the rising cost of everyday living. A fellow pastor in Oakland recently told me he cuts his pills in half to make them last longer because of the crushing costs of drugs.
Meanwhile, community members are contending with skyrocketing grocery prices and a lack of affordable healthcare options, while businesses are being forced to close their doors.
Our community is hurting. Things have to change.
The most pressing issue that demands our leaders’ attention is rising healthcare costs, and particularly the rising cost of medications. Annual prescription drug costs in California have spiked by nearly 50% since 2018, from $9.1 billion to $13.6 billion.
Last month, Gov. Newsom included measures in his budget that would encourage greater transparency, accountability, and affordability across the prescription drug supply chain. His plan would deliver real relief to struggling Californians. It would also help expose the hidden markups and practices by big drug companies that push the prices of prescription drugs higher and higher. The legislature should follow the Governor’s lead and embrace sensible, fair regulations that will not raise the cost of medications.
Some lawmakers, however, have advanced legislation that would drive up healthcare costs and set communities like mine back further.
I’m particularly concerned with Senate Bill (SB) 41, sponsored by Sen. Scott Wiener (D-San Francisco), a carbon copy of a 2024 bill that I strongly opposed and Gov. Newsom rightly vetoed. This bill would impose significant healthcare costs on patients, small businesses, and working families, while allowing big drug companies to increase their profits.
SB 41 would impose a new $10.05 pharmacy fee for every prescription filled in California. This new fee, which would apply to millions of Californians, is roughly five times higher than the current average of $2.
For example, a Bay Area family with five monthly prescriptions would be forced to shoulder about $500 more in annual health costs. If a small business covers 25 employees, each with four prescription fills per month (the national average), that would add nearly $10,000 per year in health care costs.
This bill would also restrict how health plan sponsors — like employers, unions, state plans, Medicare, and Medicaid — partner with pharmacy benefit managers (PBMs) to negotiate against big drug companies and deliver the lowest possible costs for employees and members. By mandating a flat fee for pharmacy benefit services, this misguided legislation would undercut your health plan’s ability to drive down costs while handing more profits to pharmaceutical manufacturers.
This bill would also endanger patients by eliminating safety requirements for pharmacies that dispense complex and costly specialty medications. Additionally, it would restrict home delivery for prescriptions, a convenient and affordable service that many families rely on.
Instead of repeating the same tired plan laid out in the big pharma-backed playbook, lawmakers should embrace Newsom’s transparency-first approach and prioritize our communities.
Let’s urge our state legislators to reject policies like SB 41 that would make a difficult situation even worse for communities like ours.
About the Author
Rev. Dr. VanHook is the founder and pastor of The Community Church in Oakland and the founder of The Charis House, a re-entry facility for men recovering from alcohol and drug abuse.
Alameda County
Council Approves Budget to Invest in Core City Services, Save Fire Stations, Invest in Economic Development
I am most proud of our ability to fund these critical city services without the use of one-time fixes. We are still suffering the consequences of last year’s budget, where a majority of the Council, myself not included, chose to incorporate anticipated proceeds from the sale of the Coliseum to fund essential services. Since the sale has still not yet been completed, the lack of funds led to drastic cuts in city services, including the temporary closure of fire stations, staff layoffs, and the cancellations of many service contracts.

By Janani Ramachandran, District 4 Oakland City Councilmember
On Wednesday, June 11, City Council took a bold step to prioritize investing in essential city services to get our beautiful Town back on track. As Chair of the Finance Committee, I am proud to have led a collaborative process, alongside Councilmembers Rowena Brown, Zac Unger, and Charlene Wang, to develop a set of amendments to the proposed FY 2025-2027 budget which passed successfully with a vote of 6 – 1. Despite facing a $265 million structural budget deficit, we were able to restore funding to ensure that all 25 fire stations remain open, fund 5 police academies, invest millions of dollars to combat illegal dumping and sideshow prevention, improve our permitting processes, fund a “business incentives” program to revitalize our commercial corridors, improve upon our homelessness prevention work, amplify the city’s anti-trafficking programs, re-instate our tree services division, staff up our Auditor’s office – all while preventing any layoffs of city staff, keeping our senior centers and after-school programs open, and crisis services like MACRO funded.
I am most proud of our ability to fund these critical city services without the use of one-time fixes. We are still suffering the consequences of last year’s budget, where a majority of the Council, myself not included, chose to incorporate anticipated proceeds from the sale of the Coliseum to fund essential services. Since the sale has still not yet been completed, the lack of funds led to drastic cuts in city services, including the temporary closure of fire stations, staff layoffs, and the cancellations of many service contracts. The budget that we passed this week proudly does not fund recurring expenses with anticipated one-time revenue – and moves our city towards being fiscally responsible with our taxpayers’ funds.
Our budget comes in response to the widespread and consistent calls from across Oakland’s diverse communities asking us to prioritize funding solutions to the issues that have most directly impacted our residents’ safety and quality of life. Our priorities are also inspired by our belief that Oakland is on the way not only to financial recovery, but also to global recognition. Oakland can attract and preserve businesses of all sizes with safer, cleaner streets. We can and will have more large-scale festivals that celebrate our culture, concerts that uplift our incredible local musicians, conferences that attract patrons from across the world, and award-winning restaurants that top national charts. We are on our way to rebuilding a thriving economy and having a cultural renaissance will create more jobs for Oaklanders while also generating more revenue for the City through sales and business taxes.
I am grateful for the close partnership with our new Mayor Barbara Lee, and know that she shares our values of ensuring we are prioritizing keeping Oakland’s residents safe, our streets clean, and our businesses prosperous in an open and fiscally responsible manner. I am also thankful to our City Administrator, Jestin Johnson, and former Interim Mayor Kevin Jenkins’ efforts to produce the initial proposal that our Council budget team used as a starting point for our amendments, and for their shared commitment to transparency and ethical government. I am especially grateful for every resident that took the time to make their voice heard throughout this rigorous budget process. I have no doubt that we are on the verge of true change, and that together we will bring Oakland back to being the world-class city I know it can be.
-
Activism4 weeks ago
Oakland Post: Week of May 28 – June 30, 2025
-
#NNPA BlackPress2 weeks ago
It Just Got Even Better 2026 Toyota RAV4 AWD GR Sport Walkaround
-
Activism3 weeks ago
Remembering George Floyd
-
Activism2 weeks ago
Oak Temple Hill Hosts Interfaith Leaders from Across the Bay Area
-
Alameda County2 weeks ago
Council Approves Budget to Invest in Core City Services, Save Fire Stations, Invest in Economic Development
-
#NNPA BlackPress4 weeks ago
WATCH: Five Years After George Floyd: Full Panel Discussion | Tracey’s Keepin’ It Real | Live Podcast Event
-
Activism2 weeks ago
Oakland Post: Week of June 11 – 17, 2025
-
Activism2 weeks ago
“We Are Better Than This”: Black Caucus Denounces L.A. County ICE Raids as Multiple Protests Erupt