Dealerships should brace themselves for closer scrutiny on fair lending practices -- even though most stores were exempted from regulatory oversight by the Federal Reserve's new Consumer Financial Protection Bureau.
Andrew Sandler, an attorney who represents several auto lenders, says there is a new emphasis on fair lending from an entirely different quarter: the U.S. Justice Department.
Ultimately, banks could cut off dealerships whose statistics even hint at discrimination, he says.
"There's a convergence," Sandler said in a phone interview following his presentation this month at the Consumer Bankers Association's CBA Live conference in Hollywood, Fla.
"The regulators will be putting more pressure on the banks, so the banks will be putting more pressure on the dealers. At the same time, the auto lenders are -- that is, GMAC is -- subject to greater scrutiny, a much higher level of examination, because now it's a bank," he said.