Smith v Chrysler Financial Co.
Chrysler Agrees To Settle Minority Lawsuit
DaimlerChrysler's North American financing arm has tentatively settled class-action lawsuits brought by minority customers in Chicago and New Jersey who alleged racial bias in the automaker's lending policies. DaimlerChrysler Services North America, agreed to spend $3.5 million to provide DaimlerChrysler employees with anti-discrimination training and sponsor consumer financial literacy programs in minority communities. In addition, under the terms of the settlement, DaimlerChrysler Services will also contribute $1.8 million to non-profit groups to assist and educate consumers on lending practices. "The company is changing its practices instead of paying money out,'' said one of the consumer attorneys in the case.
The settlement comes more than two years after a group of African American and Hispanic customers filed a lawsuit alleging they were discriminated after Chrysler evaluated their credit applications. The case was filed in U.S. District Court of the District of New Jersey.
According to the settlement, DaimlerChrysler Services North America will limit the amount dealers can mark up interest rates and will offer several billion dollars in no mark-up loans to African American and Hispanic customers, according to the settlement filed in federal court in New Jersey.
"The markups were costing consumers several hundred dollars to more than $1,000 per car, depending on the value of the car and the length of the loan,'' said one of the lawyers for consumers in the case.
