The FTC Agreed Not to Enforce Three Court Orders

The Federal Trade Commission signed agreements declining to enforce parts of three federal court orders against auto dealers previously accused of charging Black or Latino borrowers more. The dealers did not persuade courts to vacate the orders. Instead, the FTC reached new agreements without notifying the judges and, in at least one case, without notifying a government coplaintiff.

The Northern District of Illinois, which handled one affected case, said it was not given an opportunity to evaluate the new arrangement. In Arizona, attorney general Kris Mayes called the FTC’s move “outrageous” after her office had jointly pursued Coulter Motor Company and former general manager Gregory DePaola over alleged higher interest charges and add-on costs for Latino customers. Another matter involved Passport, a dealership chain that the FTC said had received letters from a financial institution warning of disparities in markups charged to Black borrowers.

The strongest defense

An administration has substantial discretion over which violations it pursues and how it spends limited enforcement capacity. The FTC says the earlier cases relied on statistical analyses intended to establish disparate-impact liability, and it no longer plans to enforce that category of claim. On that account, the agreements align old obligations with a new legal position rather than granting favors to particular dealers.

But a court order is not an agency memo awaiting the next leadership team’s edits. It records a remedy accepted or imposed through litigation, often after other public bodies and affected people have invested time in the case. If an agency can privately promise not to enforce material provisions, regulated parties gain a second route around an order: do not overturn it, just wait for the regulator to stop carrying it.

The incentive map

The dealers gain relief without another courtroom fight. FTC leaders gain a fast way to apply their policy across completed cases. Judges lose notice and the chance to decide whether their orders may be altered. Coplaintiffs face the prospect that a partner can subtract enforcement from a joint victory. Borrowers bear the least visible risk because the disputed conduct occurs inside discretionary markups, interest terms and add-on fees that are difficult for one customer to compare across race or ethnicity.

The next move belongs partly to the courts and the sidelined coplaintiffs. They can ask whether these documents represent ordinary enforcement discretion or an unauthorized revision of judicial relief. If courts accept the practice, future settlements will carry an unprinted expiration clause tied to agency leadership. If they reject it, the FTC may have to defend its new policy in the room it bypassed.