Office of Public Affairs | Department of Justice | The Department of Justice and the Consumer Financial Protection Bureau (CFPB) announced today a settlement to resolve allegations that Toyota Motor Credit Corporation (Toyota) engaged in a pattern or practice of discrimination against African-American and Asian/Pacific Islander borrowers in auto lending. Toyota, based in Torrance, California, is the nation’s largest captive auto lender, and the fifth largest auto lender overall.
Through the settlement, Toyota agrees to limit significantly the discretion of car dealers to charge interest rate markups on Toyota loans. Notably, Toyota has also committed that it will not increase the interest rates it quotes to car dealers in order to fund additional nondiscretionary dealer compensation implemented as part of the settlement. The settlement also provides $19.9 million in compensation for borrowers who took out loans between January 2011 and January 2016 and paid higher markup based on the alleged discrimination. Additionally, Toyota will pay up to $2 million to African-American and Asian/Pacific Islander borrowers with markup disparities while Toyota is preparing to implement the new policies. The new policies must be in place by August 2016.
Source: U.S. Department of Justice | Read the full article here.