What happened
On July 14, 2015, the CFPB and Justice Department announced a resolution with American Honda Finance Corporation, the U.S. captive auto lender (ticker on this file is parent Honda Motor, HMC). The agencies said Honda’s dealer-markup policy meant thousands of African-American, Hispanic, and Asian and Pacific Islander borrowers paid higher interest than white borrowers from January 2011 through July 14, 2015, regardless of creditworthiness. The CFPB consent order said African-American borrowers paid, on average, over $250 more in interest than similarly situated white borrowers. Those figures are the Bureau’s consent-order determinations, not a jury’s.
Honda agreed to pay $24 million into a fund for those borrowers and to tighten dealer discretion. The CFPB said it assessed no civil penalty because of Honda’s conduct in changing the pricing system. The DOJ consent order states there was no factual finding or adjudication; Honda said it entered the deal to avoid litigation and asserted fair treatment of customers. That is a no-admission consent order. This file does not treat an Alabama plant rumor as a settlement.
The Cookout read
Mixed. Who pays more to finance the car is a fair-lending question with Black borrowers named in the order. $24 million is labeled as restitution, not generosity. Honda’s denial sits on the same page as the check. This file will not pretend a consent order is a trial, or that the finance-arm case is something it is not.