Honda Financial Services Customer Service is a division of the American Honda Motor Corporation that provides auto financing for consumers who purchase or lease a new or used Honda or Acura vehicle. Its products include retail installment sales contracts, and the company also offers loans to college graduates and a variety of other programs. The company also offers motorcycles, power equipment and automotive parts. Honda Financial Services is headquartered in Torrance, California and operates in the United States.
The Department of Justice and the Consumer Financial Protection Bureau today announced a settlement with American Honda Finance Corporation (Honda) to resolve claims that the company engaged in a pattern or practice of discrimination against African-American, Hispanic and Asian/Pacific Islander borrowers in auto lending. Under the settlement, Honda will pay $24 million to a fund that will compensate victims of its past conduct. The company will also establish a program to reduce the likelihood of future discrimination and improve its monitoring and compliance systems.
The settlement is designed to compensate thousands of affected borrowers who had their loans financed by Honda between January 2011 and July 14, 2015. The agencies allege that Honda violated the Equal Credit Opportunity Act by giving car dealers discretion to charge different interest rates on auto loans depending on a borrower’s race or national origin, instead of based on the borrower’s objective creditworthiness. As a result, the average African-American victim was obligated to pay over $250 more in total loan costs because of discrimination, while the average Hispanic and Asian/Pacific Islander victim paid over $200 more. honda financial services customer service