Honda Settles DOJ Charges That It Overcharged Minority Borrowers & History of the ECOA
Wasn’t there some law passed about this —LIKE 40 YEARS AGO?
The auto finance arm of Honda on Wednesday agreed to repay $24 million to minority borrowers to settle a Justice Department complaint that it overcharged them.
Thousands of minorities paid higher interest rates on Honda auto loans than white borrowers, according to a Justice Department complaint filed in a federal Los Angeles court.
Honda pledged to restructure its auto financing program as part of the settlement, the company and DOJ said.
More: Honda Settles DOJ Charges That It Overcharged Minority Borrowers
The Equal Credit Opportunity Act (ECOA) is a United States law (codified at 15 U.S.C. § 1691 et seq.), enacted in 1974, that makes it unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction, on the basis of race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract);[1] to the fact that all or part of the applicant’s income derives from a public assistance program; or to the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The law applies to any person who, in the ordinary course of business, regularly participates in a credit decision, including banks, retailers, bankcard companies, finance companies, and credit unions.
The is the same law that made it illegal for banks to deny a woman a mortgage because she her husband, father or brother isn’t a co-signer.
When the Banking committee marked up the ECOA, congresswoman Lindy Boggs added the provision banning discrimination due to sex or marital status without informing the other members of the committee beforehand, personally inserting the language on her own and photocopying new versions of the bill.[3] She then told the other committee members, “Knowing the members composing this committee as well as I do, I’m sure it was just an oversight that we didn’t have ‘sex’ or ‘marital status’ included. I’ve taken care of that, and I trust it meets with the committee’s approval.”[3] The committee unanimously approved the bill.[3]
KNOW YOUR RIGHTS