Toyota to Pay About $21.9 Million to Black and Asian Borrowers to Settle Discrimination Investigation
Federal regulators alleged that Toyota's financial arm discriminated between the white borrowers and the black and Asian borrowers which lead to an investigation. Now, Toyota's financing division, Toyota Motor Credit Corp will pay close to $21.9 million to its black and Asian borrowers who shelled out more for their auto loans compared to the whites.
In Torrance, since 2013, Toyota Motor Credit Corp. was under investigation of the Department of Justice and the federal Consumer Financial Protection Bureau. A boarder investigation into auto financing practices by lenders led to revealing the discrimination by Toyota's financial arm. Similar settlements have happened with other key auto credit companies after the probe was initiated.
However, the agency found Toyota Motor Credit did not discriminated between the customers directly, but the dealerships of the automaker spiked the interest rates more for black and Asian borrowers compared to their white counterparts.
The investigating authorities discovered that the Asian borrowers paid 0.18 percentage point more and the black borrowers paid 0.27 percentage point more compared to the whites who had taken similar kinds of loans and had credit histories that were alike.
Announcing the settlement, U.S. Atty. Eileen M. Decker of the Central District of California said, "No consumer should be forced to pay more money for a loan because of their race or national origin."
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