DOJ Announces Settlement Of Auto Lending Discrimination Suit

more+
less-

On September 6, the DOJ announced the resolution of a long-running lawsuit against an auto dealer and a bank that financed many of the dealer’s loans, in which the government alleged that the dealer and the bank violated ECOA by charging non-Asian customers higher interest rate markups than other customers over a three-year period. The bank entered into a partial consent decree in 2009 and agreed to pay a total of $410,000 to non-Asian borrowers to resolve the allegations against it. The dealer chose to litigate and obtained a dismissal in trial court; that order was reversed last year by the Ninth Circuit. The dealer agreed to a consent decree  with the DOJ on September 4 that fully resolved all claims against it. The dealer, which is now out of business, specifically denied the government’s allegations and the decree made clear the outcome was a “compromise of disputed allegations.” Under the terms of the decree, the dealer will pay up to a total of $125,000 to non-Asian customers who were charged higher dealer interest rate markups. If the dealer or its principal shareholder re-enter the business of automobile lending within the two year duration of the consent decree, it will be required to implement clear guidelines for setting dealer markup and pricing, in compliance with ECOA, and establish fair lending training for its employees and officers.

Written by:

Published In:

DOJ

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BuckleySandler LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×