Honda Finance Facing Car Loan Discrimination Investigation

Honda Motor Co.’s U.S. financing unit said Tuesday that the Consumer Financial Protection Bureau and the U.S. Department of Justice are set to file charges alleging it discriminates against certain borrowers in its pricing practices for loans made through auto dealerships.
In a Tuesday filing with the U.S. Securities Exchange Commission, American Honda Finance Corp. said the CFPB and DOJ plan to take legal enforcement actions against the company for violating the law by charging discriminatory loan rates to dealership customers.

“AHFC has now received a notice that the agencies have authorized enforcement actions against AHFC, alleging discrimination in automobile loan pricing to certain borrowers by dealers and alleging the loan pricing disparities were caused by AHFC’s business practices related to dealers,” the company said in the filing, signed by AHFC Vice President Paul C. Honda.
AHFC said the agencies previously contacted it during a review of pricing practices by dealers originating retail installment sales contracts for automobiles. The agencies were seeking information to help them determine if pricing practices of dealers resulted in discriminatory pricing of these loans to certain customers.