Tags: honda | racial | bias | settlement | reform

Honda Racial Bias Claims Settled With $24 Million Payment and Reform

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By    |   Wednesday, 15 Jul 2015 03:08 PM

The Honda racial bias claims were settled between the Japanese automaker and the Obama administration Tuesday in a $24 million agreement.

The Department of Justice and Consumer Financial Protection Bureau announced hat Honda had agreed to make changes to its auto financing process after it faced complaints saying minority car buyers were charged higher interest rates on vehicle loans, The Hill reported.

“We commend Honda for its leadership in agreeing to impose lower caps on discretionary markups and for its commitment to treating all of its customers fairly without regard to race or national origin,” head of the Justice Department’s Civil Rights Division Vanita Gupta told the newspaper.

The allegations accuse Honda of charging African Americans $250, Hispanics $200, and Asian and Pacific Island buyers $150 more on average.

The company is limiting the decisions of its dealerships in determining the interest rates for buyers. It will also pay $24 million to customers who have made complaints about discrimination.

Honda also had to pay $1 million for a consumer financial education program, USA Today reported.

“We believe that Honda’s new compensation system balances fair compensation for dealers and fair lending for consumers,” Gupta said.

The financial protection bureau released a settlement in which director Richard Cordray said the agreement could set a model for car leasing and retail and auto lender “should take note of” it, according to USA Today.

Honda also released a statement expressing the company’s commitment to its customers and developing solutions, but the American Honda Finance denied wrongdoing, USA Today reported.

The business “strongly opposes any form of discrimination, and we expect our dealers to uphold this principle as well,” the company said in a statement, The Wall Street Journal reported.

“Honda affirmatively asserts that it has treated all of its customers without regard to race or national origin, and that its business practices have promoted and achieved fairness across all customer groups,” the company said in a consent order, according to USA Today.

Lobbyists for the automakers in Washington, D.C., expressed criticism over the agreement as they questioned the intervention of the administration into the car financing industry.

“Today’s government-imposed order will hamstring the ability of thousands of consumers to negotiate lower interest rates with their local auto dealership,” National Automobile Dealers Association Chairman Bill Fox said in a statement, The Hill reported.

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The Honda racial bias claims were settled between the Japanese automaker and the Obama administration Tuesday in a $24 million agreement.
honda, racial, bias, settlement, reform
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2015-08-15
Wednesday, 15 Jul 2015 03:08 PM
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