Settlement reached in GMAC car loan discrimination litigation
"General Motors Acceptance Corp. yesterday agreed to settle a class-action lawsuit, filed in Nashville six years ago, that claimed discrimination against blacks and Hispanics borrowing money to buy vehicles."
"In the settlement, the GM consumer lending unit said it will cap markups at 2.5 percentage points for loan terms up to 60 months and 2 percentage points for longer-term loans."
"The settlement, which was as much as 15 months in the making, also requires that loan documents tell borrowers that interest rates may be negotiable and that the dealer may retain part of the finance charge."
"It channels $1.6 million to yet-to-be-chosen consumer groups for credit-education programs and requires GMAC to offer at least 1.25 million no-markup car loans to qualified black and Hispanic borrowers in the next five years."