Department of Justice Announces Settlement to Resolve Discriminatory Indirect Lending Allegations: Department of Justice and Evergreen Bank Group Enter into Consent Order Requiring Implementation of Dealer Compensation Policy and Payment of $395,000 in Consumer Redress

Sullivan & Cromwell LLP - May 12, 2015
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On May 7, 2015, the Department of Justice (“DOJ”) announced that it had reached a settlement with Evergreen Bank Group of Oak Brook, Illinois (“Evergreen Bank” or the “Bank”) to resolve allegations of discriminatory lending practices relating to indirect motorcycle lending.  The consent order (the “Consent Order”) requires Evergreen Bank to pay $395,000 in consumer redress and to implement dealer compensation policies to remedy alleged violations of the Equal Credit Opportunity Act (“ECOA”).  The Evergreen Bank Consent Order is the first public enforcement action since the December 2013 coordinated orders against Ally Financial and Ally Bank (“Ally”) by DOJ and the Consumer Financial Protection Bureau (the “CFPB” or the “Bureau”) based on a theory that a lender’s policies permitting discretionary dealer pricing may result in a discriminatory “disparate impact” on protected groups.