Honda to Pay $25 Million for Overcharging Minorities
Honda’s Financial Services branch has agreed to pay a $25 million settlement after being accused of overcharging minority borrowers.
American Honda Finance Corporation, a unit of Honda based in California, generally discriminated against African-American, Hispanic and Asian borrowers in lending, said the US Justice Department and the Consumer Financial Protection Bureau.
Thousands of minorities paid higher interest rates on Honda auto loans than white borrowers without even factoring in their credit history, according to a Justice Department complaint filed in a federal Los Angeles court.
Honda pledged to restructure its auto financing program, pay $24 million in compensation for alleged victims and pay $1 million to fund a consumer financial education program for minorities as part of the settlement.
Honda said in a statement Tuesday “AHFC strongly opposes any form of discrimination, and we expect our dealers to uphold this principle as well. We firmly believe that our lending practices have been fair and transparent.”
(Photo Credit: Kevork Djansezian/Getty Images)
