WASHINGTON, Feb. 3 (UPI) — The Consumer Financial Protection Bureau announced a settlement with Toyota Motor Credit Corp. over racially motivated pricing policies.
The bureau worked with the U.S. Department of Justice to compel the company to alter its pricing and compensation methods to reduce dealer involvement in setting discretionary interest rates, the bureau said Tuesday in a statement.
The company will also pay up to $21.9 million in restitution to African-American and Pacific Islander customers who paid higher rates than white customers. An investigation revealed that, from 2011 to 2016, Toyota Motor Credit violated the Equal Credit Opportunity Act by encouraging dealers to charge some classes more for loans. The statement said that, on average, African-American borrowers were charged $200 more for their car loans, and Pacific Islanders, on average, $100 more, than white customers.
It is the fourth time the bureau and DOJ worked to address the disparity in lending rates by race. Since 2013, Ally Financial and Ally Bank Inc., American Honda Finance Corp. and Fifth Third Bank have each paid fines, and adjusted their policies, after a government investigation.
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