American Honda Finance
Goldstein, Demchak, Baller, Borgen & Dardarian, along with co-counsel, brought a nationwide class action entitled
Pakeman, et al. v. American Honda Corporation, seeking to end discriminatory mark-ups on car loans made to African American and Latino customers.
A settlement was reached in the Honda case in January 2005, and received preliminary approval from the United States District Court for the Middle District of Tennessee on February 1, 2005. After issuing notice to class members, that Court determined that the settlement was fair and adequate and gave it final approval. The settlement resulted in enhanced consumer notices and information relating to the negotiability of the interest rate on loans, and reduced the cap on permissible mark-ups to 2.25%, which has made loans more affordable for minority borrowers. In addition, the settlement contains a loan refinance program reducing the interest rates on up to $1 billion of outstanding minority borrower loans, plus an affirmative lending program to provide pre-approved, no-mark-up loan offers to up to 625,000 minority borrowers over a five year period, with the priority in offers to be given to class members whose higher-marked up loans have been paid off prior to the settlement. Although this case is now closed for active litigation and in the monitoring/enforcement phase, we remain actively interested in other cases involving the widespread practice of discriminatory lending for automobile purchases.