American Honda Finance found guilty of illegal discrimination

Article by Christian A., on December 6, 2014

The Consumer Financial Protection Bureau and United States Department of Justice have found American Honda Finance Corp. (AHFC) responsible for illegal discrimination in pricing auto loans, the company said in filing with the US Securities and Exchange Commission.

The company also disclosed in the filing that it may face sanctions until it settles with the federal agencies. American Honda Finance Corp. is similar to a move by Toyota Motor Credit Corp. on Nov. 28. Both captive finance companies said in 2013 that the federal agencies had asked information regarding auto loans.

AHFC said that it a notice that the Agencies have authorized enforcement actions against the captive finance unit, alleging discrimination in auto loan pricing to certain borrowers by dealers and alleging the loan pricing disparities were caused by the company’s business practices related to dealers.

AFHC said the agencies may not pursue the case if it works with them to seek a “voluntary resolution.” According to AHFC, the federal agencies want monetary relief for customers as well as changes in its pricing policies.

In 2013, the Consumer Financial Protection Bureau disclosed that auto lenders were to be blamed for higher rates for dealer reserve for legally protected classes of borrowers like minorities and women. The bureau said auto lenders made those higher rates possible by allowing dealerships to impose customers with similar credit histories different rates.

If you liked the article, share on:

Topics: honda

Comments

Recommended

It has been nearly eight years since Toyota entered a new era of sports cars when it officially unveiled the production version of the Toyota 86 – also known as...
by - February 27, 2019
The new Audi TT RS – yes, the top version of the German carmaker’s facelifted TT model series – is now officially here. If you could remember, the range-topping TT...
by - February 18, 2019
Nearly half a year ago when McLaren Automotive unveiled the McLaren 600LT Coupe, the British carmaker is now introducing a version that lets its passengers enjoy the thrill of an...
by - January 25, 2019
German carmaker Volkswagen is now making the latest evolution of the new Volkswagen Golf GTI -- the new Golf GTI TCR. First unveiled as a concept at the annual GTI...
by - January 24, 2019
It has been three and a half years since BMW unveiled the sixth generation of the BMW 7 Series. Thus, it is really about to give the 7 Series a...
by - January 17, 2019