|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
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."