2:13-cv-15180-AJT-MAR Doc # 1 Filed 12/20/13 Pg 1 of 13 Pg ID 1

IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

UNITED STATES OF AMERICA,

)

)

Plaintiff,

)

)

v.

)

)

ALLY FINANCIAL INC.

)

and ALLY BANK,

)

)

Defendants.

)

_____________________________________________)

CIVIL ACTION NO.

COMPLAINT 1. The United States of America brings this action against Ally Financial Inc. and Ally Bank (collectively, “Ally”) for discriminating against thousands of African-American, Hispanic, and Asian/Pacific Islander borrowers across the United States who have obtained loans from Ally to finance automobiles. The discrimination is caused by Ally’s policy and practice that allows dealers to include markups in the interest rates on automobile loans in a hidden manner not based on the borrower’s creditworthiness or other objective criteria related to borrower risk. The United States brings this action to enforce provisions of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. §§ 1691-1691f, and its implementing regulation, Regulation B, 12 C.F.R. Part 1002. 2. Between April 2011 and the present, this system caused approximately 100,000 African-American borrowers, 125,000 Hispanic borrowers, and 10,000 Asian/Pacific Islander borrowers to pay Ally higher interest rates for their automobile loans than non-Hispanic white (“white”) borrowers because of their race or national origin and not based on their creditworthiness or other objective criteria related to borrower risk. The average AfricanAmerican victim was obligated to pay over $300 more during the term of the loan because of
1

2:13-cv-15180-AJT-MAR Doc # 1 Filed 12/20/13 Pg 2 of 13 Pg ID 2
discrimination, and the average Hispanic and Asian/Pacific Islander victim was obligated to pay over $200 more during the term of the loan because of discrimination.
3. Ally is one of the largest automobile lenders in the United States. In 2012, Ally was the leading funder of automobile loans through franchised dealers in the United States among lenders not owned by an automobile manufacturer. Since April 2011, Ally funded nearly three million loans through over 12,000 automobile dealers nationwide. During the first nine months of 2013, Ally funded more than $20 billion in automobile loans. Ally Bank is also one of the nation’s twenty-five largest banks, with more than $90 billion in assets.
4. Ally sets an interest rate for each loan it approves based on the consumer’s creditworthiness and other objective criteria related to credit risk. From at least April 2011 and continuing to the present, Ally has maintained a specific policy and practice that allows automobile dealers to then mark up that risk-based interest rate in ways that are not connected to the consumer’s creditworthiness or other objective criteria related to borrower risk.
5. Ally typically retains a portion of the profits earned from this interest rate markup and pays the remainder to dealers. As a result, Ally’s policy and practice creates financial incentives for dealers to mark up borrowers’ interest rates above those established based on the consumer’s creditworthiness or other objective criteria related to borrower risk.
6. From at least April 2011 and continuing to the present, Ally has not provided adequate constraints or monitoring across its portfolio of loans to prevent discrimination from occurring through charging markups despite knowing or having reason to know that its policy and practice of allowing dealers to mark up consumers’ interest rates creates a substantial risk of discrimination. Ally conducted no monitoring of markup disparities until March 2013, and its monitoring since then has been entirely inadequate.
7. As a result of Ally’s dealer markup and compensation policy and practice and its lack of compliance monitoring, African-American, Hispanic, and Asian/Pacific Islander borrowers paid higher interest rates for their automobile loans than white borrowers, not based
2

2:13-cv-15180-AJT-MAR Doc # 1 Filed 12/20/13 Pg 3 of 13 Pg ID 3
on creditworthiness or other objective criteria related to borrower risk, but because of their race and national origin.
8. The United States brings this lawsuit to hold Ally accountable for its serious violations of law and to remedy the substantial and widespread harmful consequences of its discriminatory lending policy and practice.
9. This Court has jurisdiction pursuant to 15 U.S.C. § 1391e(h) and 28 U.S.C. § 1345. Venue is proper in this District under 28 U.S.C. § 1391.
PARTIES 10. The United States is authorized to initiate a civil action in federal district court whenever a matter is referred to the Attorney General pursuant to 15 U.S.C. § 1691e(g) or the Attorney General has reasonable cause to believe that a pattern or practice in violation of the ECOA has occurred. 15 U.S.C. § 1691e(h). 11. Defendant Ally Financial Inc. is a bank holding company, incorporated in the State of Delaware with a principal place of business in the State of Michigan. Ally Financial Inc. was known as GMAC, Inc. until 2010. As of September 30, 2012, Ally Financial Inc. had $151 billion in total assets, and it is subject to examination by the Consumer Financial Protection Bureau (“CFPB”). 12. Defendant Ally Bank is a subsidiary of Defendant Ally Financial Inc. Ally Bank is chartered by the State of Utah and has deposits that are insured by the Federal Deposit Insurance Corporation. As of September 30, 2013, Ally Bank had $92.1 billion in total assets, and it is subject to examination by the CFPB. 13. Both Defendants conduct their automobile lending in a coordinated and identical manner, using common policies and practices. 14. Ally funds purchases of automobiles through a model known as “indirect lending.” A consumer can use one of two methods to finance an automobile purchase: (1) “direct lending” in which the consumer applies directly to the institution underwriting, setting the
3

2:13-cv-15180-AJT-MAR Doc # 1 Filed 12/20/13 Pg 4 of 13 Pg ID 4
terms of, and funding the loan, or (2) “indirect lending” in which the automobile dealer submits the consumer’s loan application to the institution underwriting, setting the terms of, and funding the loan. In indirect lending, the loan takes the form of a “retail installment contract,” which the consumer signs at the time he or she purchases the automobile. In turn, the indirect lender purchases the retail installment contract from the dealer soon after the automobile sale on terms set by the lender.
15. Although Ally has agreements with several automobile manufacturers to pay Ally in order to subsidize some or all of the interest payments in order to boost sales of the manufacturer’s models, the majority of Ally’s loans are made without such subsidies. Loans made without a manufacturer subsidy are known as “non-subvented loans”.
16. Ally also has agreements with each of the over 12,000 individual automobile dealers. These agreements established the terms under which Ally will fund automobile loans by purchasing retail installment contracts from the dealers, including dealer compensation for arranging the loan. These agreements specify narrow circumstances in which Ally can force a dealer to repurchase a retail installment contract or reimburse Ally for loan default or prepayment.
17. Ally’s agreements with automobile dealers specify that Ally will purchase only retail installment contracts that are acceptable to Ally and at interest rates specified by Ally. As part of deciding whether the loan is acceptable, Ally takes responsibility for determining the creditworthiness of each consumer. Ally’s agreements also require dealers to provide consumers with a disclosure that explains that their loan application is being submitted for Ally’s decision on whether or not to purchase the loan.
18. Ally’s agreements with automobile dealers require that all loan applications they submit to Ally must comply with the policies, conditions, and requirements that Ally sets for dealers.
4

2:13-cv-15180-AJT-MAR Doc # 1 Filed 12/20/13 Pg 5 of 13 Pg ID 5
19. Both Defendants are creditors within the meaning of the ECOA, 15 U.S.C. § 1691a(e), and Regulation B, 12 C.F.R. § 1002.2(l). Both Defendants regularly participate in the decision to extend credit through taking responsibility for underwriting retail installment contracts, regularly participate in setting the terms of credit by establishing interest rates and communicating those rates to automobile dealers for inclusion in retail installment contracts, and influence credit decisions by indicating to dealers whether or not they will purchase retail installment contracts.
INVESTIGATION 20. In September 2012, the CFPB began an examination of the indirect automobile lending practices of Ally from April 1, 2011 to March 31, 2012. The examination included an evaluation of Ally’s compliance with fair lending laws and regulations in its indirect automobile lending program. 21. The CFPB analyzed Ally’s lending policies, procedures, and internal controls, including Ally’s dealer markup and compensation policy and practice from April 2011. The Bureau also performed an analysis of Ally’s loan-level data on the automobile loans Ally funded between April 1, 2011 and March 31, 2012 to test for lending discrimination. 22. After providing Ally with an opportunity to respond to the results of the CFPB’s analysis, the CFPB determined it had reason to believe that Ally had engaged in a pattern and practice of lending discrimination on the basis of race and national origin in violation of the ECOA, 15 U.S.C. § 1691(a)(1). The CFPB referred Ally to the United States Department of Justice pursuant to the ECOA, 15 U.S.C. § 1691e(g), and the December 6, 2012 Memorandum of Understanding between the United States Department of Justice and the CFPB. 23. Based on the CFPB referral, the Department of Justice has engaged in an investigation of Ally’s indirect automobile lending policies, practices, and procedures, including reviewing Ally’s loan-level data on the more than 1.21 million automobile loans Ally funded between April 1, 2011 and March 31, 2012.
5

2:13-cv-15180-AJT-MAR Doc # 1 Filed 12/20/13 Pg 6 of 13 Pg ID 6
FACTUAL ALLEGATIONS 24. To determine whether it will fund a loan, and on what terms, Ally conducts an underwriting process on each loan application submitted by one of its dealers on behalf of a consumer. As part of the underwriting, Ally uses a proprietary system of credit scoring to assign one of six credit tiers to the applicant, or applicants, receiving each loan it approves for funding. 25. From at least April 2011, and continuing to the present, Ally periodically sets a specified “buy rate” for the loans it funds. Ally determines the buy rate for each loan based on its current cost of funds plus adjustments to reflect the borrower’s creditworthiness and other objective criteria related to borrower risk. These adjustments use a proprietary underwriting and pricing model to account for the consumer’s credit risk, as reflected in the assigned credit tier, and also consider whether the automobile is new or used and the length of the loan. The dealers, but not the consumers, learn the buy rate. The buy rate reflects the minimum interest rate, absent a special payment to Ally from the dealer, for a non-subvented loan that Ally will fund. 26. From at least April 2011, and continuing to the present, Ally has maintained a specific policy and practice, reflected in its agreements with individual dealers, that allows dealers to mark up a consumer’s interest rate above Ally’s established buy rate, and that compensates dealers from the increased interest revenue to be derived from the markup . It is Ally’s specific policy and practice to permit dealers to mark up the buy rate for reasons not related to the borrowers’ creditworthiness or other objective criteria related to borrower risk. Ally capped the dealer markup to 250 basis points for loans with terms of 60 monthly payments or less and to 200 basis points for loans with terms of greater than 60 monthly payments or for loans to borrowers assigned to the lowest two tiers of Ally’s proprietary system of credit scoring. A basis point is a percentage of the total amount of a loan, with one hundred basis points equaling one percent of the loan amount. 27. The ECOA limits the collection of self-identified race and ethnic data for automobile loans. 12 C.F.R. § 1002.5(b) (prohibiting the collection of race or national origin
6

2:13-cv-15180-AJT-MAR Doc # 1 Filed 12/20/13 Pg 7 of 13 Pg ID 7
data from a non-mortgage loan applicant, except in the case of a creditor’s self-test for ECOA compliance). Information about the race and ethnicity of borrowers on automobile loans that Ally funded can be calculated based on public data published by the United States Census Bureau for the race and ethnicity of individuals with the same surname and for the race and ethnicity of individuals living in the same neighborhood, using a process called the Bayesian Improved Surname Geocoding (BISG) method. The BISG method builds on the fact that many surnames in the United States are predominantly associated with a particular race or ethnicity— especially for Hispanic and Asian/Pacific Islander individuals—and that many neighborhoods are segregated by race and ethnicity—especially neighborhoods where African Americans live.
28. The BISG method is recognized by social scientists, statisticians, and economists as a tested and accurate way to determine differences in experiences based on race or ethnicity for large groups of individuals for whom self-identified race and ethnicity data is not available.
29. Statistical analyses of non-subvented automobile loans Ally funded through purchasing retail installment contracts between April 1, 2011 and March 31, 2012, using the BISG method to identify race and national origin demonstrate statistically significant discriminatory pricing disparities based on race and national origin. Statistical significance is a measure of probability that an observed outcome would not have occurred by chance. As used in this Complaint, an outcome is statistically significant if the probability that it could have occurred by chance is less than 5%. During the time period covered by the analyses, Ally funded over 800,000 non-subvented loans, of which nearly 200,000 had African-American, Hispanic, or Asian/Pacific Islander borrowers or co-borrowers.
30. During the time period covered by the analyses, on average, Ally charged African-American borrowers more than white borrowers in interest rate markups not based on creditworthiness or other objective criteria related to borrower risk. The disparity was approximately 29 basis points for non-subvented loans, and it is statistically significant.
7

2:13-cv-15180-AJT-MAR Doc # 1 Filed 12/20/13 Pg 8 of 13 Pg ID 8
31. These disparities mean that African-American borrowers affected by the discrimination were obligated to pay, on average, over $300 more in interest than white borrowers over the life of their loans not based on creditworthiness or other objective criteria related to borrower risk.
32. During the time period covered by the analyses, on average, Ally charged Hispanic borrowers more than white borrowers in interest rate markups not based on creditworthiness or other objective criteria related to borrower risk. The disparity was approximately 20 basis points for non-subvented loans, and it is statistically significant.
33. These disparities mean that Hispanic borrowers affected by the discrimination were obligated to pay, on average, over $200 more in interest than white borrowers over the life of their loans not based on creditworthiness or other objective criteria related to borrower risk.
34. During the time period covered by the analyses, on average, Ally charged Asian/Pacific Islander borrowers more than white borrowers in interest rate markups not based on creditworthiness or other objective criteria related to borrower risk. The disparity was approximately 22 basis points for non-subvented loans, and it is statistically significant.
35. This disparity means that Asian/Pacific Islander borrowers affected by the discrimination were obligated to pay, on average, over $200 more in interest than white borrowers over the life of their loans not based on creditworthiness or other objective criteria related to borrower risk.
36. From at least April 2011, and continuing to the present, in setting the terms and conditions for the automobile loans it funds, Ally accounts for individual borrowers’ differences in creditworthiness and other objective criteria related to borrower risk by setting the buy rate as explained in Paragraph 25. The interest rate markups charged by Ally to consumers are separate from, and not controlled by, the adjustments for creditworthiness and other objective criteria related to borrower risk already reflected in the buy rate. No Ally policy directs dealers to consider creditworthiness or other objective criteria related to borrower risk for a second time,
8

2:13-cv-15180-AJT-MAR Doc # 1 Filed 12/20/13 Pg 9 of 13 Pg ID 9
after they had already been considered in setting the buy rate, in determining interest rate markups. Accordingly, the racial and ethnic interest rate markup disparities described in Paragraphs 30-35 are not adjusted for creditworthiness and other objective criteria related to borrower risk.
37. For the reasons described in Paragraph 36, it is not proper to include factors measuring creditworthiness and other objective criteria related to borrower risk in the statistical analysis of interest rate markup disparities. Nevertheless, statistical analyses of Ally’s interest rate markups during the time period covered by the analyses that control—both separately and in concert through regression—for creditworthiness and risk-related factors such as credit tier, new/used status, and loan length demonstrate a similar pattern of racial and ethnic interest rate markup disparities, with the magnitude only somewhat diminished from the disparities described in Paragraphs 30-35. Thus, accounting for creditworthiness or other objective criteria related to borrower risk a second time does not explain the racial and ethnic interest rate markup disparities, even if those factors were relevant to the subjective pricing adjustments measured by interest rate markups.
38. The analysis described in Paragraph 37 that separately controls for which one of the six tiers of Ally’s proprietary system of credit scoring to which Ally assigned the borrower determined that Ally discriminates most severely against those borrowers it classifies as the most creditworthy by its proprietary system of credit scoring. Ally had greater racial and ethnic interest rate disparities for borrowers in the best credit tier than in any of the other credit tiers. In other words, Ally’s most qualified African-American, Hispanic and Asian/Pacific Islander borrowers with the least credit risk suffer the most discrimination.
39. Additionally, statistical regression analyses of Ally’s lending data that control for multiple creditworthiness and risk-related factors such as credit tier, new/used status, and loan length, also demonstrate that the racial and ethnic disparities in interest rate markup described in Paragraphs 30-35 produced racial disparities, compared to similarly situated white borrowers, in
9

2:13-cv-15180-AJT-MAR Doc # 1 Filed 12/20/13 Pg 10 of 13 Pg ID 10
the annual percentage rate of interest Ally charged that cannot be explained by creditworthiness and risk-related factors. Thus, accounting for creditworthiness and risk-related factors does not explain the racial and ethnic disparities in the interest rate paid by the borrower, even if those factors were relevant to the subjective pricing adjustments measured by interest rate markup.
40. The higher markups that were charged to African-American, Hispanic, and Asian/Pacific Islander borrowers for the subject loans are a result of Ally’s specific policy and practice of allowing dealers to mark up a consumer’s interest rate above Ally’s established buy rate and compensating dealers from that increased interest revenue.
41. Ally’s specific policy and practice of allowing dealers to mark up a consumer’s interest rate above Ally’s established buy rate and compensating dealers for those markups has continued from April 2011 to the present.
42. During this period, Ally has not required dealers to document reasons for charging markups, it has not monitored whether discrimination occurred across its portfolio of loans through charging markups, and Ally has not at all times provided detailed fair lending training to its dealers.
43. Ally conducted no monitoring for lending discrimination in interest rate markups before March 2013.
44. The fair lending monitoring system that Ally established in March 2013—after receiving notice of the CFPB’s preliminary finding of discrimination—reviews for large interest rate markup disparities only within individual dealers, and only for dealers from which it buys at least five minority and five white loans during the previous six months. The monitoring program does not review company-wide disparities across its portfolio of loans, and also misses many sizeable and statistically significant within-dealer disparities. During the first round of reviews under the program, Ally identified only 21 of its over 12,000 dealers with possible markup disparities warranting further analysis, and it ultimately determined that only two dealers would be subject to any corrective action. Those two dealers were subject only to voluntary education,
10

2:13-cv-15180-AJT-MAR Doc # 1 Filed 12/20/13 Pg 11 of 13 Pg ID 11
which involves making the dealer aware of potential liability under the ECOA and providing voluntary training regarding the ECOA.
45. Ally’s specific policy and practice are not justified by a legitimate business need that cannot reasonably be achieved as well by means that are less disparate in their impact on African-American, Hispanic, and Asian/Pacific Islander borrowers.
46. Ally knew or had reason to know that its policy and practice of allowing dealers to mark up consumers’ interest rates creates a substantial risk of discrimination. Ally has not taken effective action to change the discriminatory policy and practice or to identify and compensate victims of the discrimination.
EQUAL CREDIT OPPORTUNITY ACT VIOLATIONS 47. Ally’s policies and practices, as alleged herein, constitute discrimination against applicants with respect to credit transactions on the basis of race and national origin in violation of the Equal Credit Opportunity Act, 15 U.S.C. § 1691(a)(1). 48. Ally’s policies and practices, as alleged herein, constitute a pattern or practice of resistance to the full enjoyment of rights secured by the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691-1691f. 49. Between April 2011 and the present, Ally has charged over a quarter of a million consumers nationwide discriminatory interest charges for automobile loans as a result of its pattern or practice of discrimination and denial of rights as alleged herein. In addition to higher direct economic costs, some of the victims of discrimination suffered additional consequential economic damages resulting from having an excessively costly loan, including possible increased risk of credit problems, default, and repossession, and other damages, including emotional distress. They are aggrieved applicants as defined in the Equal Credit Opportunity Act, 15 U.S.C. § 1691e, and have suffered injury and damages as a result of Ally’s conduct.
11

2:13-cv-15180-AJT-MAR Doc # 1 Filed 12/20/13 Pg 12 of 13 Pg ID 12
50. Ally’s policies and practices, as alleged herein, were intentional, willful, or implemented with reckless disregard for the rights of African-American, Hispanic, and Asian/Pacific Islander borrowers.
51. The ECOA empowers this Court to grant such relief as may be appropriate, including actual and punitive damages and injunctive relief. 15 U.S.C. § 1691e(h).
PRAYER FOR RELIEF WHEREFORE, the United States prays that the Court enter an ORDER that:
(1) Declares that the policies and practices of the Defendants constitute violations of the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691-1691f;
(2) Enjoins the Defendants and their agents, employees, and successors, and all other persons in active concert or participation with them, from:
a) Discriminating on the basis of race or national origin against any person with respect to any aspect of their credit transactions; b) Failing or refusing to take such affirmative steps as may be necessary to restore, as nearly as practicable, the victims of the Defendants’ unlawful conduct to the position they would have been in but for the discriminatory conduct; and c) Failing or refusing to take such affirmative steps as may be necessary to prevent the recurrence of any such discriminatory conduct in the future; to eliminate, to the extent practicable, the effect of Ally’s unlawful practices; and to implement policies and procedures to ensure that all borrowers have an equal opportunity to seek and obtain loans on a non-discriminatory basis and with non-discriminatory terms and conditions; and (3) Awards equitable relief and monetary damages to all the victims of the Defendants’ discriminatory policies and practices for the injuries caused by the Defendants, including direct economic costs, consequential damages, and other damages, pursuant to 15 U.S.C. § 1691e(h).
12

2:13-cv-15180-AJT-MAR Doc # 1 Filed 12/20/13 Pg 13 of 13 Pg ID 13

 
 2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 1 of 24 Pg ID 20

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

UNITED STATES OF AMERICA,

)

)

Plaintiff,

)

)

v.

)

)

ALLY FINANCIAL INC. and

)

ALLY BANK,

)

)

Defendants.

)

____________________________________)

CIVIL ACTION NO. 13-15180
JUDGE ARTHUR J. TARNOW MAG. JUDGE MARK A. RANDON

CONSENT ORDER

I. INTRODUCTION This Consent Order is submitted jointly by the parties for the approval of and entry by the Court. The Consent Order resolves the claims of the United States, based on coordinated investigations by the Consumer Financial Protection Bureau (“CFPB”) and the United States through the Civil Rights Division of the Department of Justice (“DOJ”), that Ally Financial Inc. and Ally Bank (collectively, “Ally”) engaged in a pattern or practice of conduct in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. §§ 1691-1691f, by discriminating on the basis of race and national origin in the extension of credit. There has been no factual finding or adjudication with respect to any matter alleged by the United States. The parties have entered into this Consent Order to avoid the risks, expense, and burdens of litigation and to resolve voluntarily the claims in the United States’ Complaint of Ally’s alleged violation of the ECOA.

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 2 of 24 Pg ID 21
II. BACKGROUND Ally is one of the largest automobile lenders in the United States. In 2012, it was the leading funder of automobile loans through franchised dealers in the United States among lenders not owned by an automobile manufacturer. Since April 2011, Ally has funded nearly three million loans through over 12,000 automobile dealers nationwide. Ally Bank is also one of the nation’s twenty-five largest banks, with more than $90 billion in assets. The CFPB conducted an examination of Ally for compliance with ECOA and its implementing regulation, Regulation B. On November 7, 2013, the CFPB referred Ally to the United States Attorney General pursuant to Section 706(g) of the ECOA and the December 6, 2012 Memorandum of Understanding between the CFPB and the DOJ based on the CFPB’s finding that it had reason to believe Defendants have engaged in a pattern or practice of lending discrimination in violation of the Section 701(a) of the ECOA. On November 13, 2013, the DOJ initiated an investigation under the ECOA of Ally’s pricing of automobile loans in coordination with the CFPB’s investigation. In its Complaint, the United States alleges that between April 1, 2011 and the present, Ally engaged in a pattern or practice of discrimination on the basis of race and national origin in violation of the ECOA based on the interest rate “dealer markup”—the difference between Ally’s buy rate and the contract rate—paid by African-American, Hispanic, and Asian/Pacific Islander borrowers who received automobile loans funded by Ally. Ally neither admits nor denies the allegations and claims of a pattern or practice of discrimination in violation of the ECOA as set forth in the United States’ Complaint. Under the provisions of this Consent Order, Ally agrees to implement policies and procedures designed to ensure that the dealer markup on automobile retail installment contracts is negotiated in a
2

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 3 of 24 Pg ID 22
nondiscriminatory manner consistent with the ECOA and the Compliance Plan. In addition, Ally will compensate certain African-American, Hispanic, and Asian/Pacific Islander borrowers.
III. ALLY’S STATEMENT Ally asserts that throughout the Relevant Time Period, Ally has treated all of its customers fairly and without regard to race or national origin. Ally enters this settlement for the purpose of avoiding contested litigation with the Department of Justice and to instead devote its resources to serving its customers. Ally is an indirect auto finance company that purchases retail installment contracts from dealers. Customers negotiate their Annual Percentage Rate and other finance terms with dealers in a system where the dealer decides which finance company or bank will buy the dealers’ retail installment contracts. Most dealers regularly assign contracts to several different finance companies or banks. In competing for a dealer’s business, Ally quotes a “buy rate” to the dealer as a measure of the price it will pay to buy the contract. Ally is not a party to the negotiations that take place between independent motor vehicle dealers and their customers. Ally contends that a calculation of disparities needs to compare similarly-situated customers and include relevant explanatory factors such as creditworthiness, differences in essential transactional details such as new/used vehicle, and the selling dealer. The alleged policy by Ally is common in the industry and has been for decades. Ally has not been informed that the United States contends that Ally or any of its employees engaged in any intentional discrimination or disparate treatment of minorities.
3

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 4 of 24 Pg ID 23
IV. DEFINITIONS For purposes of this Consent Order, the following definitions shall apply: a. “Board” shall mean collectively the duly elected and acting Board of Directors for each of Ally Financial Inc. and Ally Bank. b. “Defendants” shall mean Ally Financial Inc. and Ally Bank (collectively, “Ally”), and any direct or indirect subsidiaries and affiliates and their successors and assigns. c. “Effective Date” shall mean the date on which this Consent Order is approved and entered by the Court. d. “Executive Officers” shall mean collectively the senior management of each of Ally Financial Inc. and Ally Bank, including but not limited to their Chief Executive Officer(s), Treasurer(s), President(s), Vice President(s), Chief Operating Officer(s), Chief Financial Officer(s), Chief Compliance Officer(s), and President(s) for Auto Finance. e. “Relevant Time Period” shall mean the period from April 1, 2011 through December 31, 2013. f. “Related Consumer Action” shall mean a private action by or on behalf of one or more consumers or any enforcement action by another governmental entity brought against either Defendant with respect to the Relevant Time Period based on substantially the same facts set forth in the Complaint. g. “Settlement Date” shall be the date on which this Consent Order is submitted to the Court, except that no deadline calculated based on the Settlement Date shall fall less than five (5) days after the Effective Date.
4

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 5 of 24 Pg ID 24
V. INJUNCTIVE RELIEF 1. Consistent with this Consent Order, Defendants are enjoined from engaging in any act or practice that discriminates on the basis of race or national origin in any aspect of the pricing of automobile loans in violation of the ECOA, 15 U.S.C. § 1691(a)(1), and Regulation B, 12 C.F.R. pt. 1002. A. Compliance Plan with Compliance Committee 2. The Board shall establish a Compliance Committee of at least three directors, no more than one of whom may be an officer or employee of either Defendant or any of its affiliates. Within twenty (20) days of the Settlement Date, the Board shall provide in writing to the CFPB and the DOJ the name of each member of the Compliance Committee. In the event of any change of membership, the Board shall submit the name of any new member in writing to the CFPB and the DOJ. 3. Until the termination of this Consent Order, the Compliance Committee shall be responsible for monitoring and coordinating each Defendant’s adherence to the provisions of this Consent Order. The Compliance Committee shall meet at least every other month, and shall maintain minutes of its meetings. 4. Within sixty (60) days of the Settlement Date, the Compliance Committee shall submit a Compliance Plan to the CFPB and the DOJ for review and determination of nonobjection that details the actions Defendants plan to take or have already taken to comply with this Consent Order; the results and status of those actions, if any; and a compliance program that shall go into effect within thirty (30) days after non-objection by the CFPB and the DOJ to the Compliance Plan and remain in effect until the termination of the Consent Order, except as
5

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 6 of 24 Pg ID 25
provided in paragraph 8 of this Consent Order. The Compliance Plan shall, at a minimum, include:
a. A dealer compensation policy that limits the maximum rate spread between Ally’s buy rate and the contract rate of the retail installment contract to an amount no more than Ally’s limits in effect throughout the Relevant Time Period;
b. Regular notices to all dealers explaining the ECOA, stating Defendants’ expectations with respect to ECOA compliance, and articulating the dealer’s obligation to price retail installment contracts in a non-discriminatory manner, including in exercising discretion to set a consumer’s contract rate when such discretion is permitted;
c. Quarterly analysis of dealer-specific retail installment contract pricing data for disparities on a prohibited basis resulting from Defendants’ dealer compensation policy;
d. Quarterly and annual analysis of portfolio-wide retail installment contract pricing data for disparities on a prohibited basis resulting from Defendants’ dealer compensation policy that reflects the same methods and controls the CFPB and the DOJ applied in their analyses described in Paragraphs 30, 32, and 34 of the Complaint, unless the CFPB and the DOJ approve the use of additional controls or methodological changes proposed by Defendants;
e. Appropriate corrective action with respect to dealers, who are identified in the quarterly analysis of dealer-specific retail installment contract pricing data for disparities on a prohibited basis, or otherwise identified, culminating in the restriction or elimination of dealers’ ability to exercise discretion in setting a consumer’s contract rate or exclusion of dealers from future transactions with Ally; and remuneration of affected consumers, within sixty (60) days of analysis that identifies statistically significant disparities in dealer markup on a prohibited basis within an individual dealer’s transactions with Defendants;
6

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 7 of 24 Pg ID 26
f. For each of African-Americans, Hispanics, and Asians/Pacific Islanders, remuneration of affected consumers by March 1 of each calendar year until the termination of this Consent Order, if portfolio-wide analysis described in paragraph 4d for the preceding calendar year identifies statistically significant dealer markup disparities for that group at or above the agreed upon target. Defendants shall remunerate affected consumers using the same methodology the CFPB and the DOJ used to calculate the damages for the Relevant Time Period set forth in paragraph 14; and
g. Specific timeframes and deadlines for implementation of the steps described above.
5. The CFPB and the DOJ shall make a determination of non-objection to the Compliance Plan or direct Defendants to revise it. In the event that the CFPB and the DOJ direct Defendants to revise the Compliance Plan, Defendants shall make the revisions and resubmit the Compliance Plan to the CFPB and the DOJ within thirty (30) days. If the DOJ and Defendants are unable to come to an agreement regarding such objections, either party may bring the dispute to the Court for resolution.
6. Upon notification that the CFPB and the DOJ have made a determination of nonobjection to the Compliance Plan, Defendants shall implement and adhere to the steps, recommendations, deadlines, and timeframes set forth in the Compliance Plan.
7. To the extent Defendants seek to materially change their Compliance Plan after its initial implementation, Defendants shall submit to the CFPB and the DOJ for review and determination of non-objection a description of the change to the Compliance Plan. Upon notification, the CFPB and the DOJ shall make a determination of non-objection to the change or direct Defendants to revise it. In the event that the CFPB and the DOJ direct Defendants to
7

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 8 of 24 Pg ID 27
revise the change, Defendants shall make the revisions and resubmit the change to the CFPB and the DOJ within thirty (30) days.
8. At any time during the pendency of this Consent Order, Defendants may submit a Non-discretionary Dealer Compensation Plan to the CFPB and the DOJ for review and determination of non-objection.
a. The Non-discretionary Dealer Compensation Plan shall set forth a proposed nondiscretionary dealer compensation structure that includes an appropriate compliance management system that ensures compliance with the ECOA and shall be implemented within ninety (90) days after non-objection by the CFPB and the DOJ to the Non-discretionary Dealer Compensation Plan and remain in effect until the termination of this Consent Order.
b. The CFPB and the DOJ shall make a determination of non-objection to the Nondiscretionary Dealer Compensation Plan or direct Defendants to revise it. In the event that the CFPB and the DOJ direct Defendants to revise the Non-discretionary Dealer Compensation Plan, Defendants shall make the revisions and resubmit the Non-discretionary Dealer Compensation Plan to the CFPB and the DOJ within thirty (30) days.
c. Upon notification that the CFPB and the DOJ have made a determination of nonobjection to the Non-discretionary Dealer Compensation Plan, Defendants shall implement and adhere to the steps, recommendations, deadlines, and timeframes set forth in the Nondiscretionary Dealer Compensation Plan.
d. To the extent Defendants seek to subsequently change their Non-discretionary Dealer Compensation Plan after its initial implementation, Defendants shall submit to the CFPB and the DOJ for review and determination of non-objection a description of the change. Upon notification, the CFPB and the DOJ shall make a determination of non-objection to the change or
8

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 9 of 24 Pg ID 28
direct Defendants to revise it. In the event that the CFPB and the DOJ direct Defendants to revise the change, Defendants shall make the revisions and resubmit the change to the CFPB and the DOJ within thirty (30) days. Defendants may request the CFPB and the DOJ to conduct an expedited review of any proposed changes when required by circumstances related to the nondiscretionary dealer compensation structure. The CFPB and the DOJ shall conduct an expedited review of the change as soon as practicable and make a determination of non-objection to the change or direct Defendants to revise it.
e. Upon implementation of the Non-discretionary Dealer Compensation Plan, Defendants may terminate those elements of the Compliance Plan that were required by paragraphs 4a and 4c-4g of this Consent Order.
9. Six (6) months after the Settlement Date and every six (6) months thereafter until the termination of this Consent Order, Defendants, including at a minimum members of the Compliance Committee described in paragraph 2 of this Consent Order, and the CFPB, and the DOJ shall meet and confer (including in person or telephonically) to discuss the Compliance Plan, results achieved by the Compliance Plan and any modifications to the Compliance Plan that may be warranted, based on the Plan’s results, changes in the indirect automobile lending industry, or any other reason. Defendants may request confidential treatment of any records of such communications pursuant to 28 C.F.R. pt. 16. B. Reporting Requirements
10. Within forty-five (45) days of the end of the second calendar quarter after the Settlement Date, and within forty-five (45) days of the end of each quarter thereafter until the termination of this Consent Order, Defendants shall submit to the CFPB and the DOJ a true and
9

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 10 of 24 Pg ID 29

accurate written Compliance Progress Report, which has been approved by each Board, and

which shall at a minimum:

a. Separately list each action required by the Compliance Plan pursuant to paragraph

4 and this Consent Order;

b. Describe the status of each action taken or to be taken to comply with the

Compliance Plan pursuant to paragraph 4, as well as each action taken or to be taken to comply

with the other provisions of this Consent Order; and

c.

Summarize and provide supporting data of the activities set forth in paragraphs

4c-4f, including the just-completed quarter’s (and year’s, if applicable) portfolio-wide analysis

required by paragraph 4d.

11. Until the termination of this Consent Order, Defendants shall notify the CFPB and

the DOJ of any change in Defendants that may affect compliance obligations arising under this

Consent Order, prior to such change, including but not limited to, a dissolution, assignment, sale,

merger, or other action that would result in the emergence of a successor company; the creation

or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to

this Consent Order; the proposed proceedings or filings related to bankruptcy or insolvency by or

against either Defendant; or a change in Defendant Ally Financial Inc.’s or Defendant Ally

Bank’s name or main address.

C. Role of the Board

12. The Board shall review all submissions (including plans, reports, programs,

policies, and procedures) specifically required by this Consent Order prior to submission to the

CFPB and the DOJ.

10

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 11 of 24 Pg ID 30
13. Although this Consent Order requires Defendants to submit certain documents for review or non-objection by the CFPB and the DOJ, the Board shall have the ultimate responsibility for proper and sound oversight of Defendants and for ensuring that Defendants comply with federal consumer financial law, including the ECOA, and this Consent Order. In each instance in this Consent Order in which the Board is required to ensure adherence to, or undertake to perform, certain obligations of Defendants, the Board shall:
a. Authorize and adopt such actions on behalf of Defendants as may be necessary for Defendants to perform its obligations and undertakings under the terms of this Consent Order;
b. Require the timely reporting by Defendants’ management of such actions directed by Defendants’ management to be taken under the terms of this Consent Order; and
c. Require corrective action be taken in a timely and appropriate manner in the case of any material non-compliance with such actions.
VI. MONETARY PROVISIONS A. Settlement Fund
14. Within thirty (30) days of the Settlement Date, Defendants shall deposit into an interest-bearing escrow account eighty million dollars ($80,000,000.00), which represents the amount of total consumer monetary and other damages caused by the practices described in the Complaint during the Relevant Time Period. This will constitute the Settlement Fund. Defendants shall provide written verification of the deposit to the CFPB and the DOJ within five (5) days of depositing the funds described in this paragraph. Any interest that accrues will become part of the Settlement Fund and will be utilized and disposed of as set forth herein. Any taxes, costs, or other fees incurred by the Settlement Fund shall be paid by Defendants.
11

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 12 of 24 Pg ID 31
15. Within sixty (60) days of the Settlement Date, Defendants shall enter into a contract retaining an Independent Settlement Administrator (“Administrator”) to conduct the activities set forth in paragraphs 17 through 25. The selection of the Administrator and the terms of the Administrator’s contract related to the Administrator’s duties pursuant to this Consent Order shall be subject to the non-objection of the CFPB and the DOJ. Defendants shall bear all costs and expenses of the Administrator. Defendants’ contract with the Administrator shall require the Administrator to comply with the provisions of this Consent Order as applicable to the Administrator. The Administrator’s contract shall require the Administrator to work cooperatively with Defendants and the CFPB and the DOJ in the conduct of its activities, including reporting regularly to and providing all reasonably requested information to the CFPB and the DOJ. The Administrator’s contract shall require the Administrator to comply with all confidentiality and privacy restrictions applicable to the party who supplied the information and data to the Administrator.
16. In the event that the CFPB or the DOJ have reason to believe that the Administrator is not materially complying with the terms of its contract with Defendants, Defendants shall present for review and determination of non-objection a course of action to effectuate the Administrator’s material compliance with its contract with Defendants. The CFPB and the DOJ shall make a determination of non-objection to the course of action or direct Defendants to revise it. In the event that the CFPB and the DOJ direct revisions, Defendants shall make the revisions and resubmit the course of action to the CFPB and the DOJ within thirty (30) days. Upon notification that the CFPB and the DOJ have made a determination of nonobjection, Defendants shall implement the course of action. In the event that the DOJ and Defendants are unable to agree upon the terms of a contract or a course of action to effect the
12

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 13 of 24 Pg ID 32
Administrator’s material compliance with its contract with Defendants, the parties may present the matter to the Court. The Court shall determine whether the contract is sufficient to require the Administrator’s full compliance with the provisions of the Order as applicable to the Administrator, or that the Administrator is materially complying with the terms of its contract with Defendants, and it shall direct Defendants to remedy promptly any deficiencies it finds.
17. The Administrator’s contract shall require the Administrator, as part of its operations, to establish cost-free means for affected consumers to contact it, including an email address, a website, a toll-free telephone number, and means for persons with disabilities to communicate effectively, including TTY. The Administrator’s contract shall require the Administrator to make all reasonable efforts to provide effective translation services to affected consumers, including but not limited to providing live English and foreign language-speaking operators to speak to affected consumers who call the toll-free telephone number and request a live operator, and providing foreign language interpretations and translations for communications with affected consumers.
18. The CFPB and the DOJ shall request from Defendants information and data the CFPB and the DOJ reasonably believe will assist in identifying affected consumers and determining any monetary and other damages, including but not limited to a database of all retail installment contracts booked by Defendants during the Relevant Time Period and all data variables the CFPB obtained during its examination. Within ninety (90) days of the Settlement Date, Defendants shall supply the requested information and data.
19. The CFPB and the DOJ shall jointly provide to the Administrator and Defendants a list of retail installment contracts with consumers that the CFPB and the DOJ have determined are eligible to receive monetary relief pursuant to this Consent Order after receipt of all the
13

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 14 of 24 Pg ID 33
information and data they requested pursuant to paragraph 18. The total amount of the Settlement Fund shall not be altered based on the number of listed retail installment contracts.
20. Within thirty (30) days after the date the CFPB and the DOJ provide the list of retail installment contracts referenced in paragraph 19, Defendants will provide to the CFPB, the DOJ, and the Administrator the name, most recent mailing address in its servicing records, Social Security number, and other information as requested for the primary borrower and each co-borrower (if any) on each listed retail installment contract (“Identified Borrower”). Such information and data shall be used by the CFPB, the DOJ, and the Administrator only for the law enforcement purposes of implementing the Consent Order. The total amount of the Settlement Fund shall not be altered based on the number of Identified Borrowers.
21. After receipt of all the information required to be provided by paragraph 20, the CFPB and the DOJ shall provide Defendants and the Administrator with the initial estimate of the amount each Identified Borrower will receive from the Settlement Fund. No individual, agency, or entity may request that the Court, the CFPB, the DOJ, Defendants, or the Administrator review the selection of Identified Borrowers or the amount to be received. The total amount of the Settlement Fund shall not be altered based on the amounts that Identified Borrowers receive.
22. The Administrator’s contract shall require the Administrator to adopt effective methods, as requested by the CFPB and the DOJ, to confirm the identities and eligibility of Identified Borrowers and provide to the CFPB and the DOJ a list of Identified Borrowers whose identities and eligibility have been confirmed (“Confirmed Borrower”) within 270 days from the date the CFPB and the DOJ provide the information described in paragraph 21.
14

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 15 of 24 Pg ID 34
23. Within sixty (60) days after the date the Administrator provides to the CFPB and the DOJ the list of Confirmed Borrowers, the CFPB and the DOJ shall provide to the Administrator a list containing the final payment amount for each Confirmed Borrower. The total amount of the Settlement Fund shall not be altered based on the number of Confirmed Borrowers or the amounts they receive. No individual, agency, or entity may request that the Court, the CFPB, the DOJ, Defendants, or the Administrator review the final payment amounts.
24. The Administrator’s contract shall require the Administrator to deliver payment to each Confirmed Borrower in the amount determined by the CFPB and the DOJ as described in paragraph 23 within forty-five (45) days. The Administrator’s contract shall also require the Administrator to skip trace and redeliver any payment that is returned to the Administrator as undeliverable, or not deposited within six (6) months.
25. The Administrator’s contract shall require the Administrator to maintain the costfree means for consumers to contact it described in paragraph 17 and finalize distribution of the final payments described in paragraphs 23 and 24 within twelve (12) months from the date the CFPB and the DOJ provide the list of final payment amounts to the Administrator in accordance with paragraph 23. Confirmed Borrowers shall have until that date to request reissuance of payments that have not been deposited.
26. The details regarding administration of the Settlement Fund set forth in paragraphs 15 through 25 can be modified by agreement of the CFPB, the DOJ, and Defendants and without further Court approval. Payments from the Settlement Fund to Confirmed Borrowers collectively shall not exceed the amount of the Settlement Fund, including accrued interest.
15

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 16 of 24 Pg ID 35
27. Defendants will not be entitled to a set-off, or any other reduction, of the amount of final payments to Confirmed Borrowers because of any debts owed by the Confirmed Borrowers. Defendants also will not refuse to make a payment based on a release of legal claims or account modification previously signed by any Confirmed Borrowers.
28. In the event that the amount of redress provided to Confirmed Borrowers after the Administrator completes distribution of funds is less than the amount of the Settlement Fund (including accrued interest), Defendants are ordered to transfer all remaining money in the Settlement Fund to the CFPB, in the form of a wire transfer to the CFPB or to such agent as the CFPB may direct, and in accordance with wiring instructions to be provided by counsel for the CFPB. Defendants shall make this payment within thirty (30) days of when the Administrator finalizes distribution of the final payments described in paragraphs 23 and 24, or twelve (12) months from the date the CFPB and the DOJ provide the list of final payment amounts to the Administrator in accordance with paragraph 23, whichever is earlier.
29. If the CFPB and the DOJ determine, in their sole discretion, that additional redress to affected consumers is wholly or partially impracticable, otherwise inappropriate, or if funds remain after the additional redress is completed, the CFPB and the DOJ may apply any remaining funds for such other equitable relief, including consumer information remedies, determined to be reasonably related to the conduct and violations alleged in the Complaint. Any funds not used for such equitable relief shall be deposited in the U.S. Treasury as disgorgement. Defendants shall have no right to challenge any actions that the CFPB, the DOJ, or their representatives may take under this paragraph.
16

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 17 of 24 Pg ID 36
B. Additional Monetary Provisions 30. In the event of any default on Defendants’ obligation to make payment under this
Section, interest, computed pursuant to 28 U.S.C. § 1961, as amended, shall accrue on any outstanding amounts not paid from the date of default to the date of payment, and shall immediately become due and payable.
31. Defendants shall relinquish all dominion, control, and title to the funds paid pursuant to this Consent Order to the fullest extent permitted by law. Defendants shall make no claim to or demand for return of the funds, directly or indirectly, through counsel or otherwise.
32. Within thirty (30) days of the entry of a final judgment, consent order, or settlement in a Related Consumer Action, Defendants shall notify the CFPB and the DOJ of the final judgment, consent order, or settlement in writing. That notification shall indicate the amount of redress, if any, that Defendants paid or are required to pay to consumers and should describe the consumers or classes of consumers to whom that redress has been or will be paid.
VII. ADMINISTRATIVE PROVISIONS A. Order Distribution and Acknowledgement
33. Within thirty (30) days of the Settlement Date, each Defendant shall deliver a copy of this Consent Order to each of its Board members and Executive Officers.
34. Until the termination of this Consent Order, each Defendant shall deliver a copy of this Consent Order to any future Board Members and Executive Officers within thirty (30) days that an individual becomes a Board Member or Executive Officer, respectively.
35. Defendants shall secure a signed and dated statement acknowledging receipt of a copy of this Consent Order, with any electronic signatures complying with the requirements of
17

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 18 of 24 Pg ID 37
the E-Sign Act, 15 U.S.C. § 7001 et seq., within thirty (30) days of delivery, from all persons receiving a copy of this Consent Order pursuant to this Subsection. B. Recordkeeping
36. Defendants shall create or retain the following business records: a. All documents and records necessary to demonstrate full compliance with each provision of this Consent Order, including but not limited to, reports submitted to the CFPB and the DOJ, analyses and all information related to the analyses conducted pursuant to paragraph 4, and all documents and records pertaining to redress, as set forth in Section VI above; b. For Defendants’ consumer automobile lending business lines, accounting records showing the gross and net revenues generated by Defendants, and all relevant affiliates; and c. All consumer complaints related to Ally’s retail installment contracts alleging discrimination (whether received directly or indirectly, such as through a third party), and any responses to those complaints or requests. 37. All business records created or retained pursuant to this Section shall be retained at least until the termination of this Consent Order, and shall be made available upon the CFPB’s or the DOJ’s request to CFPB representatives or DOJ representatives, respectively, within thirty (30) days of a request. C. Notices 38. Unless otherwise directed in writing by a CFPB or DOJ representative, all submissions, requests, communications, consents, or other documents relating to this Consent Order shall be in writing and shall be sent by overnight courier (not the U.S. Postal Service), as follows:
18

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 19 of 24 Pg ID 38
To the CFPB:
Steve Kaplan Regional Director, CFPB Northeast Region Consumer Financial Protection Bureau 140 East 45th Street, 4th Floor New York, NY 10017 The subject line shall begin: In re Ally, dated December 19, 2013
To the DOJ:
Chief Housing and Civil Enforcement Section Civil Rights Division, U.S. Department of Justice, 1800 G Street NW, Suite 7002 Washington, DC 20006 Attn: DJ 188-37-28
To Defendants:
William B. Solomon, Jr. General Counsel Ally Financial Inc. M/C 482-B09-B11 200 Renaissance Center Detroit, MI 48265-2000
Hu Benton General Counsel Ally Bank 6985 Union Park Center Midvale, UT 84047
D. Compliance and Extensions of Time
39. Any time limits for performance fixed by this Consent Order may be extended by
mutual written agreement of the CFPB, the DOJ, and Defendants. Except as provided by
paragraph 26, other modifications to this Consent Order may be made only upon approval of the
Court, upon motion by either party. The CFPB, the DOJ, and Defendants recognize that there
may be changes in relevant and material factual circumstances during the duration of this
19

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 20 of 24 Pg ID 39
Consent Order which may impact the accomplishment of its goals. The parties agree to work cooperatively to discuss and negotiate in good faith regarding any proposed modifications to this Consent Order resulting therefrom. E. Other Provisions
40. Except as set forth in paragraph 41, the provisions of this Consent Order shall not bar, estop, or otherwise prevent the CFPB or the DOJ, or any other federal or state agency or department, from taking any other action against Defendants. Defendants expressly reserve all rights and defenses against any other public or private plaintiff other than the CFPB and the DOJ.
41. The DOJ releases and discharges Defendants, and all affiliates, directors, officers, agents, servants, and employees of Defendants, from all potential liability for all ECOA claims of the United States Attorney General for discriminating on the basis of race or national origin that have been or might have been asserted by the United States Attorney General based on the practices described in the Complaint, to the extent such practices occurred prior to the Effective Date, and are known to the DOJ as of the Effective Date. Notwithstanding the foregoing, the practices alleged in the Complaint may be utilized by the DOJ in future enforcement actions against Defendants and their affiliates, including without limitation, to establish a pattern or practice of violations or the continuation of a pattern or practice of violations. This release shall not preclude or affect any right of the DOJ to determine and ensure compliance with the terms and provisions of this Consent Order, or to seek penalties for any violations thereof.
42. This Consent Order shall terminate ninety (90) days after Defendants have conducted two (2) years of annual portfolio-wide analysis and provided any associated consumer remuneration pursuant to paragraphs 4e and 4f, unless Defendants’ second annual portfolio-wide
20

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 21 of 24 Pg ID 40
analysis conducted pursuant to paragraph 4d yields statistically significant dealer markup disparities based on race or national origin at or above the agreed upon target for AfricanAmericans, Hispanics, or Asians/Pacific Islanders, in which case the Consent Order shall terminate ninety (90) days after Defendants have conducted three (3) years of annual portfoliowide analysis and provided any associated consumer remuneration pursuant to paragraphs 4e and 4f. This Consent Order shall remain effective and enforceable until such time. The DOJ will not pursue any potential violations of the ECOA against Defendants for conduct undertaken pursuant to this Consent Order during the period of this Consent Order.
43. Calculation of time limitations shall run from the Settlement Date and shall be based on calendar days, unless otherwise noted.
44. The DOJ and Defendants agree that, as of the Effective Date, litigation is not “reasonably foreseeable” concerning the matters described above. To the extent that the DOJ or Defendants previously implemented a litigation hold to preserve documents, electronically stored information, or things related to the matters described above, it is no longer required to maintain such litigation hold. Nothing in this paragraph relieves the DOJ or Defendants of any other obligations imposed by this Consent Order.
45. In the event Defendants seek to transfer or assign all or part of their operations, and the successor or assign intends on carrying on the same or similar use, as a condition of sale, Defendants shall obtain the written accession of the successor or assign to any obligations remaining under this Consent Order for its remaining term with respect to the specific operations transferred or assigned. For purposes of this paragraph, the requirements relating to the transfer or assignment of “operations” do not include the transfer or assignment of portions of Defendants’ portfolio of retail installment contracts to an independent third party entity.
21

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 22 of 24 Pg ID 41
46. The provisions of this Consent Order shall be enforceable by the DOJ. In the event that any disputes arise about the interpretation of or compliance with the terms of this Consent Order, the CFPB, the DOJ, and Defendants shall endeavor in good faith to resolve any such dispute between themselves before bringing it to the Court for resolution. The CFPB and the DOJ agree that if they reasonably believe that Defendants have materially violated any provision of this Consent Order, they will provide Defendants written notice thereof and give them thirty (30) days to resolve the alleged violation before presenting the matter to the Court. In the event of either a failure by either Defendant to perform in a timely manner any act required by this Consent Order or an act by either Defendant in violation of any provision hereof, the DOJ may move the Court to impose any remedy authorized by law or equity.
47. Nothing in this Consent Order shall be construed as allowing Defendants, their Board, Executive Officers, or employees to violate any law, rule, or regulation.
48. This Consent Order is enforceable only by the parties. No person or entity is intended to be a third party beneficiary of the provisions of this Consent Order for purposes of any civil, criminal, or administrative action, and accordingly, no person or entity may assert a claim or right as a beneficiary or protected class under this Consent Order.
49. Each party to this Consent Order shall bear its own costs and attorney’s fees associated with this litigation.
50. To the extent that a specific action by Defendants is required both by this Consent Order and the Consent Order issued by the CFPB in the administrative adjudication styled In the Matter of Ally Financial Inc. and Ally Bank, entered on or about December 20, 2013, action by Defendants that satisfies a requirement under any such administrative adjudication will satisfy that same requirement under this Consent Order.
22

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 23 of 24 Pg ID 42

51. The Court shall retain jurisdiction for the duration of this Consent Order to enforce its terms, after which time the case shall be dismissed with prejudice.
SO ORDERED, this 23rd day of December, 2013.

s/Arthur

J. Tarnow UNITED STATES DISTRICT JUDGE

The undersigned hereby apply for and consent to the entry of the Order:

For the United States:

ERIC HOLDER Attorney General

BARBARA L. McQUADE United States Attorney Eastern District of Michigan

JOCELYN

SAMUELS

Acting Assistant Attorney General

Civil

Rights Division

s/ Judith E. Levy

JUDITH E. LEVY

STEVEN

Assistant United States Attorney

Chief, Civil Rights Unit

Eastern District of Michigan

211 West Fort Street, Ste. 2001

Detroit, Michigan 48226

COTY

Tel.: (313) 226-9727

Deputy

Fax: (313) 226-3271

Judith.Levy@usdoj.gov

DANIEL

United Civil Housing

Washington, Tel.: Fax: Daniel.Mosteller@usdoj.gov

s/Steven H. Rosenbaum H. ROSENBAUM
Chief
s/Coty R. Montag R. MONTAG Chief
s/Daniel P. Mosteller P. MOSTELLER
Trial Attorney States Department of Justice
Rights Division and Civil Enforcement Section
950 Pennsylvania Avenue, N.W. – NWB DC 20530
(202) 514-4713 (202) 514-1116

23

2:13-cv-15180-AJT-MAR Doc # 5 Filed 12/23/13 Pg 24 of 24 Pg ID 43
For Defendant Ally Financial Inc.: s/ with consent of Robert A. Neaton ROBERT A. NEATON General Counsel – Automotive Finance Ally Financial Inc. 200 Renaissance Center Detroit, Michigan 48265-2000 P41451 For Defendant Ally Bank: s/ with consent of Hu A. Benton HU A. BENTON General Counsel Ally Bank 6985 Union Park Center Midvale, Utah 84047
24

 
 Case: 2:13-cv-15180-AJT-MAR As of: 02/02/2014 07:20 PM EST 1 of 2
U.S. District Court Eastern District of Michigan (Detroit) CIVIL DOCKET FOR CASE #: 2:13−cv−15180−AJT−MAR

CLOSED

United States of America v. Ally Financial Inc. et al Assigned to: District Judge Arthur J. Tarnow Referred to: Magistrate Judge Mark A. Randon Cause: No cause code entered
Plaintiff

Date Filed: 12/20/2013 Date Terminated: 12/23/2013 Jury Demand: None Nature of Suit: 440 Civil Rights: Other Jurisdiction: U.S. Government Plaintiff

United States of America

represented by Judith E. Levy U.S. Attorney's Office 211 W. Fort Street Suite 2001 Detroit, MI 48226 313−226−9100 Email: judith.levy@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

V. Defendant Ally Financial Inc.
Defendant Ally Bank

represented by Timothy A. Devine Ally Financial Inc. 200 Reinaissance Center MC 482−B09−B11 Detroit, MI 48265 313−656−3477 Email: timothy.devine@ally.com ATTORNEY TO BE NOTICED
represented by Timothy A. Devine (See above for address) ATTORNEY TO BE NOTICED

Date Filed 12/20/2013
12/20/2013 12/20/2013 12/20/2013
12/23/2013 12/23/2013

# Docket Text
1 COMPLAINT filed by United States of America against All Defendants. Plaintiff requests summons issued. No Fee Required − US Government. County of 1st Defendant: Wayne. [Previously dismissed case: No] [Possible companion case(s): None] (Levy, Judith) (Entered: 12/20/2013)
2 SUMMONS Issued for *Ally Bank* (TMcg) (Entered: 12/20/2013)
3 SUMMONS Issued for *Ally Financial Inc.* (TMcg) (Entered: 12/20/2013)
A United States Magistrate Judge of this Court is available to conduct all proceedings in this civil action in accordance with 28 U.S.C. 636c and FRCP 73. The Notice, Consent, and Reference of a Civil Action to a Magistrate Judge form is available for download at http://www.mied.uscourts.gov (TMcg) (Entered: 12/20/2013)
4 NOTICE of Appearance by Timothy A. Devine on behalf of All Defendants. (Devine, Timothy) (Entered: 12/23/2013)
5 CONSENT ORDER ADMINISTRATIVELY CLOSING CASE. The Court shall retain jurisdiction for the duration of this Consent Order to enforce its terms, after which the case shall be dismissed with prejudice. Signed by District Judge Arthur

Case: 2:13-cv-15180-AJT-MAR As of: 02/02/2014 07:20 PM EST 2 of 2 J. Tarnow. (MLan) (Entered: 12/23/2013)