MADISON, Wis. – Wisconsin Attorney General Peg Lautenschlager is going after dealers who charge black and Latino car buyers higher rates than white car buyers for auto loans, and she wants changes in state law to allow her office to seek necessary remedies. The National Automobile Dealers Association reported that Lautenschlager's office received numerous complaints from black customers that their loans were being unfairly marked up and obtained data from a class action lawsuit against American Honda Finance Corp. that showed the practice was particularly widespread in Wisconsin. A preliminary check by the AG's investigators found dealer markups of as much as 4 to 6 percentage points for minorities. Lautenschlager is calling for a passage of a state law proposed by Gov. Jim Doyle that would allow her office to bring lawsuits on behalf of state residents who believe their civil rights have been violated. She's also proposing changing the state law so all transactions are subject to regulations governing consumer credit transactions, and she wants the Department of Financial Institutions to change an administrative rule to prohibit race-based discrimination in granting credit. The rules currently prohibit discrimination only on the basis of marital status and sex. Lastly, Lautenschlager wants the DFI to demand financial documents from dealerships "to determine the breadth and impact of this practice." Speaking at a recent news conference in Milwaukee, the Attorney General said, "Charging any citizen a higher rate because of the color of his or her skin is wrong, and it must end now." A report released last year by the Consumer Federation of America stated that markups such as these were costing American car buyers an average of about $1,000 per car buyer in extra charges. The markups hit one in four of all American car buyers, but affect minorities disproportionately.

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