U.S. Authorities Accuse Toyota Arm of Discriminatory Loan Pricing
Toyota Motor Credit Corp, the lending arm of Toyota Motors Corp, could face an enforcement action from U.S. authorities over its pricing of auto loans through dealerships and could be forced to reimburse borrowers or pay a fine, the company said late Friday, reported Reuters.
On Nov. 25, the U.S. Department of Justice and the Consumer Financial Protection Bureau sent a letter to Toyota Motor Credit, saying that its auto lending practices "resulted in discriminatory pricing of loans to certain borrowers in contravention of applicable laws," the company said in a filing with the U.S. Securities and Exchange Commission.
Unless Toyota Motor Credit agrees to a resolution with the agencies voluntarily, which would include "monetary relief" in addition to changes to its loan pricing policies, the Justice Department and the CFPB were prepared to bring an enforcement action, the filing said.
Toyota Motor Credit added it would work with the agencies to reach a resolution.
A spokesman for the CFPB declined to comment. A spokeswoman for the Department of Justice did not immediately respond to a request for comment.
In December 2013, Ally Financial Inc (ALLY.N) was forced to pay $98 million to resolve similar discriminatory loan pricing charges from the Justice Department and the CFPB.
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