Press Releases

For Immediate Release
September 23, 2005

DFI Strengthens Discrimination Rule in Credit Transactions

(Madison) The Department of Financial Institutions (DFI) Office of Consumer Affairs has adopted a new rule, effective approximately December 1, 2005, making it illegal for finance companies to charge higher interest rates based on race or a number of other customer characteristics. Currently, the rule prohibits only discrimination based on gender or marital status.

The new rule will now add not only race but also age, creed, religion, color, disability, marital status, sex, national origin, ancestry, sexual orientation, membership in the military, or receiving public assistance as bases of illegal discrimination under the Wisconsin Consumer Act.

The rule-making is part of DFI's regular review and updating of administrative rules that govern how financial matters are handled in Wisconsin. This rule was promulgated by DFI after the agency learned that the Wisconsin Consumer Act did not afford the same discrimination protections as other state statutes. In particular, a report prepared by a Vanderbilt University professor last year found that African-American auto buyers across the country paid an average of $568 more in finance charges than whites in similar circumstances.

DFI Cabinet Secretary Lorrie Keating Heinemann said, "With this new rule, DFI defines discrimination on a range of issues to be unconscionable practices under the Wisconsin Consumer Act, which regulates consumer credit transactions. Now victims of lending discrimination will be able to pursue lawsuits in state courts."