Honda’s finance arm to be charged with fair lending violations


NEW YORK Dec 2 (Reuters) – American Honda Finance Corp, the
U.S. lending arm of carmaker Honda Motor Co Ltd, said
on Tuesday that American law enforcement agencies are preparing
to charge the finance company with discriminatory pricing of
loans made through auto dealerships.

The U.S. Department of Justice and the Consumer Financial
Protection Bureau have authorized an enforcement action against
American Honda Finance Corp for violating laws that prevent
lenders from charging certain borrowers higher interest rates,
the company said in a filing with the U.S. Securities and
Exchange Commission.

The agencies are seeking fines or consumer relief as well as
changes to the lender’s pricing practices and policies, but they
could defer bringing the action if the company agrees to a
“voluntary resolution” of the accusations, according to the
filing.

American Honda Finance Corp’s disclosure comes shortly after
Toyota Motor Credit Corp, the U.S. lending arm of Toyota Motors
Corp, received a letter from the Justice Department and
the CFPB accusing it of similar practices.

A CFPB spokesman declined to comment. A spokeswoman for the
Justice Department did not immediately respond to a request for
comment.

The company said in the filing that it is cooperating with
the agencies and looking to find a “mutually agreeable
resolution.”

In December 2013, Ally Financial Inc was ordered to
pay $98 million to resolve similar accusations from the Justice
Department and the CFPB.

(Reporting by Peter Rudegeair; Editing by Steve Orlofsky)