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African Americans Allege AmSouth Bank Engages in Credit Discrimination

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Case ID: 2940 | Civil Rights | 07/27/2004

A class action has been filed against AmSouth Bank on behalf of African Americans who alleges that its car lending unit unfairly makes more expensive loans to blacks than whites in violation of the federal Equal Credit Opportunity Act. The action seeks unspecified compensatory and punitive damages.

The action alleges that AmSouth's car lending unit charges higher interest rates on loans to black borrowers than white borrowers for reasons unrelated to creditworthiness. The markup is allegedly in the form of subjective credit pricing, and the action alleges that this subjectivity in pricing breeds discrimination. The action cites a study of AmSouth Bank loans by Vanderbilt University professor Mark Cohen that allegedly shows blacks pay AmSouth $247 more in markup on average than whites. The study also allegedly indicates that blacks are 155% more likely marked up on their loans than whites.


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