Earlier this month, American Honda Finance Corporation (AHFC) entered into a settlement with the CFPB and the Department of Justice to resolve charges that it engaged in unlawful discrimination in violation of the Equal Credit Opportunity Act (ECOA). The settlement includes AHFC’s agreement to change its auto dealer compensation policy, pay $24 million in restitution, and distribute $1 million towards the administration and operation of a consumer financial education program. It is noteworthy, however, that the settlement does not include payment of any monetary penalties by AHFC, which perhaps reflects statements in the DOJ’s and CFPB’s press releases praising AHFC for its industry “leadership” in agreeing to change its policy.
When the settlement was announced, we prepared a detailed legal alert. We intended to share the alert with our blog readers at that time but due to an oversight, belatedly share it now.