The Consumer Financial Protection Bureau released a bulletin on Thursday warning indirect auto lenders that they could be violating fair-lending laws if they do not stop auto dealers who often mark up the loans they issue.

The bulletin was released after the bureau discovered disparities in interest rates charged to minority borrowers in a recent investigation.

"Consumers should not have to pay more for a car loan simply based on their race," CFPB Director Richard Cordray said in a press release. "Today's bulletin clarifies our authority to pursue auto lenders whose policies harm consumers through unlawful discrimination."

"The CFPB does not have authority to supervise auto dealers but it is holding the lenders responsible for monitoring those markups as well as borrower profiles in the contracts with auto dealers. The move is likely to significantly change relationships and may increase regulatory burden, particularly on smaller lenders, according to industry representatives," writes American Banker's Rachel Witkowski.

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