Frequently Asked Questions and Answers

Concerning the restitution process and refund opportunity pursuant to paragraph 33 of the June 24, 2021, settlement between the Adirondack Trust Company and the New York State Department of Financial Services

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August 2021

You may be eligible for restitution

The Adirondack Trust Company has reached an agreement with the New York State Department of Financial Services (NYSDFS) to resolve a dispute about its indirect auto lending program.

The background

Consumers finance the purchase of a car either directly through a bank, credit union or other lending institution, or indirectly, where the financing is provided through a car dealer partnered with a lender. In these cases, an auto dealer collects a prospective borrower’s credit information and submits an application to the lender. The lender then informs the dealer of the terms under which it will agree to purchase the loan. A dealer may then add an additional cost to the loan, called “dealer markup.” The NYSDFS found that Adirondack Trust’s indirect automobile program charged higher dealer markups for members of minority groups.

Importantly, we were not accused of intentional discrimination. NYSDFS said they “did not find evidence of any intentional discrimination against applicants on the part of the Bank or its employees.” The NYSDFS also commended our “substantial cooperation with its investigation, through timely and appropriate responses to requests for information and the production of documents and data […].” NYSDFS found that Adirondack Trust’s policy or practice of permitting automobile dealers to impose a dealer markup without any justification on the basis of objective credit related factors resulted in disparate impact on the basis of ethnicity, in violation of the law.

We are committed to providing equal access to financial services for all of our customers and communities. We abhor and condemn discrimination on the basis of race, sex or gender identity, creed, color, sexual orientation, disability, nationality, marital or familial status, age and military status. We are one community, and we all benefit when we support each other.

To resolve the matter, we are providing reimbursement to borrowers identified by the statistical methods employed by the NYSDFS as Asian or Pacific Islander, African American, or Hispanic who were charged higher dealer markups on their loans than borrowers identified as Non-Hispanic White between January 1, 2016, and October 31, 2017.

We hope the information that follows will help answer any questions.