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Rhinebeck Bank has entered into a consent order with the New York State Department of Financial Services (NYDFS) to resolve alleged violations of federal and New York state fair lending laws concerning interest rate markups charged by automobile dealers through the bank’s indirect auto finance business.
The NYDFS found that the bank’s dealer markup policy allowed dealers to choose the amount of markup they charged to borrowers within certain limits imposed by the bank. Using the Bayesian Improved Surname Geocoding (BISG) proxy methodology, the NYDFS predicted the race and ethnicity of Rhinebeck borrowers and determined through statistical analysis that African American, Hispanic and Asian borrowers on average paid more markup than similarly situated non-Hispanic white borrowers. The NYDFS did not find evidence of any intentional discrimination against any protected class by the bank or its employees. The Bank’s policy or practice of permitting dealers to charge a dealer markup without any justification on the basis of objective credit-related factors resulted in a disparate impact on the basis of race.
To view the consent order, please click here.
As part of this settlement, the bank will be paying restitution to impacted borrowers whose loans were originated between January 1, 2017 and March 31, 2022. If you believe you are entitled to restitution under the consent order but have not received restitution by January 31, 2023, you may submit a claim packet. For instructions on how to file a claim, please refer to the Frequently Asked Questions below.
2. Will the bank pay restitution to borrowers?
The bank will provide restitution to certain eligible borrowers whose auto loans were originated during the period January 1, 2017 through March 31, 2022 (the “Restitution Period”). Some borrowers have already been identified by the NYDFS for restitution and will automatically receive their restitution. Borrowers who do not receive restitution in this initial phase may submit a claim packet as described in FAQ 4.
3. Who is eligible to receive restitution?
To be eligible for restitution, you must meet the following preliminary criteria:
To receive restitution, you must submit a completed claim packet. Once a completed claim packet is received by the bank, your eligibility for restitution will be determined. For further details on submitting a claim, refer to FAQ 4.
4. How do I submit a claim?
If you meet all of the eligibility criteria listed above under FAQ 3 and would like to submit a claim, please complete a claim packet electronically or by mail. After receiving your completed claim packet, the bank will determine whether you are eligible for restitution and the amount of any restitution. Restitution may be awarded in the form of a principal balance reduction, rate reduction and/or refund by check.
You may submit a claim packet electronically by clicking here or by printing this PDF document and mailing it to:
2 Jefferson Plaza
Poughkeepsie, NY 12601
ATTN: Internal Risk Management Department
5. What is the deadline for submitting a claim?
If submitting electronically, the claim packet must be received no later than 11:59 pm Eastern Time on November 18, 2023. If submitting by mail, the claim packet must be postmarked no later than November 18, 2023.
6. How do I get more information?
For more information, please visit the NYDFS website at https://www.dfs.ny.gov/.