The Federal Trade Commission has struck agreements with two auto dealerships and a former general manager that promise the agency won't enforce court-ordered fair lending programs or obligations against unlawful credit bias, according to a report published by Wired. The deals effectively erase portions of existing federal court orders that required the defendants to monitor for discrimination and train staff on civil rights law. Arizona's attorney general, whose office partnered with the FTC on one of the cases, called the move "outrageous," while the Northern District of Illinois said it never had a chance to review one of the new agreements.

The FTC is eliminating these requirements because the defendants didn't explicitly tell salespeople to charge Black and Latino borrowers differently, the report states. The agency had previously alleged all three parties charged people of color more through discretionary markups and add-on fees compared to white borrowers on average. In the Passport car dealership case, the FTC claimed a financial institution had sent the chain multiple letters flagging disparities in markup rates for Black borrowers. The FTC and Arizona had also accused Coulter Motor Company and Gregory DePaola, a former general manager, of charging Latino customers higher interest and add-on product costs in violation of the Equal Credit Opportunity Act.

The agreements remove two key sections from the court orders. One section barred the defendants from discriminating against credit applicants based on race, color, religion, national origin, sex, marital status, age, or reliance on public assistance. The other required periodic employee training on fair lending and civil rights, written guidelines for fee assessment, and termination of staff who engaged in discriminatory conduct. The FTC also pledged not to assist anyone investigating compliance with these deleted sections, including state partners who worked on the original cases. Arizona's attorney general's office said they plan to continue enforcement alone.

The FTC said in a press release its past accusations "were based on statistical analyses designed to show disparate-impact liability" and that it won't enforce those types of claims anymore. Disparate-impact discrimination occurs when a policy that appears neutral causes disproportionate harm to a protected group without intentional bias, unlike disparate-treatment discrimination which involves deliberate targeting. Aaron Rieke, chief legal engineer at Privlex and a former FTC attorney adviser, explained it's "actually a really hard theory where you have to identify a specific policy, prove that it caused a disparity," and demonstrate the policy doesn't serve a legitimate purpose. Logan Koepke, senior project director at nonprofit Upturn, noted disparate-impact analysis matters more now because AI and automated systems that can take unintended actions are increasingly used for decisions like loan eligibility.

The agreements are highly unusual because they concern federal court orders, which typically require a motion filed with a judge when an agency wants changes. The commission voted on the deals in early August, but they took effect over half a year earlier in November. The FTC never notified Arizona about the DePaola agreement and never submitted it to the court for review, according to the state's attorney general's office. The Northern District of Illinois confirmed the FTC never asked for court approval to modify the actual order finalized in 2022. This approach follows a Trump administration executive order titled "Restoring Equality of Opportunity and Meritocracy" that directed agencies to review past orders and take "appropriate action," with the administration saying disparate-impact liability "undermines our national values." In 2025, the Consumer Financial Protection Bureau tried a similar tactic with mortgage lender Townstone Financial, but a judge denied the request, warning it would "erode public confidence in the finality of judgements" and create a precedent where any new administration could undo settlements simply because leadership disliked them. The precedent from these FTC agreements could make it harder for future administrations to restore the deleted protections. Federal agencies now face a choice between institutional consistency and political alignment, with state regulators left to bridge the gap when national enforcement retreats.