Consumer Bureau Action Tracker

CFPB – American Honda Finance Corporation


State

Nationwide

target

American Honda Finance Corporation

Topics

Fair Lending, Auto Loans

In 2015, the CFPB ordered the “U.S. financing arm of Honda” to refund $24 million to its customers, alleging the company “discriminated against minorities by charging them higher interest rates on auto loans than white customers.” According to the CFPB, Honda charged “thousands of black, Latino, Asian and Pacific Islander borrowers as much as $250 more over the life of an auto loan simply because of their race or national origin.”

  • American Honda’s “pricing policies from 2011 through this summer led to allegations that thousands of black, Latino, Asian and Pacific Islander borrowers paid as much as $250 more over the life of an auto loan simply because of their race or national origin.” A black borrower “paid more than $250 in additional borrowing costs over the life of the loan” on average, a “Latino paid more than $200 in additional costs, and the average Asian and Pacific Islander paid more than $150 in such costs.” [Jim Puzzanghera, “Honda to pay $24 million to borrowers to settle discrimination probes,” The Los Angeles Times, 07/14/15]
  • Honda was ordered to refund “$24 million to borrowers.” Part of the settlement between the regulators and American Honda Finance included the company committing “to change the way it prices loans to limit dealer markups.” Honda was required to “contact borrowers and refund them the money they overpaid on their loans because of the higher interest rates” and “agreed to spend $1 million on a financial education program on auto loans for minorities.” Honda also “agreed to limit dealer markups to 1.25 percentage point for loans of five years or less and 1 percentage point for longer loans.” [Jim Puzzanghera, “Honda to pay $24 million to borrowers to settle discrimination probes,” The Los Angeles Times, 07/14/15]

Status

Inactive or Resolved


2015-CFPB-0014 7/14/2015 7/14/2015

CFPB and DOJ Reach Resolution with Honda to Address Discriminatory Auto Loan Pricing
http://www.consumerfinance.gov/policy-compliance/enforcement/actions/american-honda-finance-corporation/

  • Consumer Financial Protection Bureau (CFPB)
  • Administrative filing
  • None
  • Nonbank
  • $24,000,000
  • Not Available

Close

Join The Fight!

We need your help to hold powerful special interests accountable and empower hardworking Americans. Join our fight today!