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July 15, 2015

US: American Honda Finance paying for overcharging minority borrowers

American Honda Finance will settle a complaint by the US Department of Justice (DOJ) and pay US$24m to minority borrowers.

American Honda Finance will settle a complaint by the US Department of Justice (DOJ) and pay US$24m to minority borrowers.

The complaint said  the company overcharged minority borrowers who paid higher rates of interest than white borrowers on Honda vehicle loans.

The settlement also requires Honda to restructure its financing programme, The Washington Post reported.

The Consumer Financial Protection Bureau and the DOJ started investigating Honda’s loan interest rates in 2013 and found that, compared with white borrowers, minority borrowers were paying US$150-$250 extra.

American Honda Finance said it “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.”

The company will also pay an additional $1m to the DOJ for an auto consumer financial education programme.

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