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1/1/2005
NASHVILLE- American Honda Finance Corp. and three banks have settled class-action lawsuits brought by black customers who accused them of racial bias in automobile lending policies. The suits alleged that company policies routinely allowed car dealers to charge black customers higher rates on auto loans than were given to whites with similar financial histories.Under the settlement, American Honda, and the three banks - Bank One, Bank of America Corp. and U.S. Bancorp - will set tighter caps on how much car dealers can increase interest charges on car loans.The settlements awaiting approval in U.S. District Court in Nashville Include a stipulation that the four lenders will offer car loans without any markups to up to 2.4 million minority consumers.Wyman Gilmore, an attorney for the plaintiffs, confirmed the terms of the settlement but declined further comment.The banks agreed to cap markups at 2.5 percent on loans up to 60 months, 2 percent on loans between 61 and 71 months and 1.75 percent on loans of 72 months or more. Bank One will offer 875,000 reproved loans without markups to black and other minorities, Bank of America will offer 600,000 of the loans and U.S. Bancorp will offer 300,000. Bank One, which was acquired last year by J.P. Morgan Chase & Co. in New York, agreed to the settlement but denied the allegations of the plaintiffs in a statement.By Colin FlyThe Associated Press
The Birmingham News
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