The AFL-CIO, the largest U.S. labor federation, is urging Santander Consumer USA (NYSE:SC) to stop allowing car dealers to add interest to a vehicle loan unrelated to the borrower's creditworthiness, Bloomberg reports.
A group of organizations including the AFL-CIO plans to submit a letter to SC Chairman William Rainer and CEO Scott Powell at the company's annual meeting today.They argue that the company should end the practice, called dealer participation, to prevent racial discrimination in lending.
The letter also urges Santander Consumer to disclose vehicle loan data by race and to create a stakeholder advisory group.
“We continually review transactions and processes to prevent disparate impact, including dealer participation, which is a common industry mechanism for compensating dealers for their role in facilitating the financing transaction," a spokeswoman told Bloomberg.
Previously: Santander Consumer USA up 4% as FCA considers buying Chrysler Capital (June 1)