RE: Settlement with the Department of Justice and Consumer Financial Protection Bureau
Jul 14, 2015 — American Honda Finance Corporation (AHFC) has reached an agreement with the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) that shows our commitment to work together to be part of the solution and to establish the path forward that best supports our Honda and Acura customers and dealers with clear and convenient financing options.
AHFC strongly opposes any form of discrimination, and we expect our dealers to uphold this principle as well. We firmly believe that our lending practices have been fair and transparent.
AHFC has a difference of opinion with the CFPB and the DOJ regarding the methodology used to make determinations about lending practices, but we nonetheless share a fundamental agreement in the importance of fair lending.
In cooperation with the CFPB and the DOJ, AHFC will be working closely with our Honda and Acura dealers in proactively adjusting our pricing programs to continue to give our customers the ability to choose the loan that is best for supporting their purchase of Honda and Acura products.
As part of this new program, AHFC will announce later this year adjustments to our caps for dealers in setting the rate for retail installment contracts lower than the present level. We will be implementing this change in combination with other adjustments and modifiers in a way that continues to support our Honda and Acura dealers’ present business compensation with a full array of financing options.
As a result of this settlement, no civil penalties have been assessed to AHFC. The company will establish a $24 million fund that will be used to compensate customers identified by the CFPB and the DOJ.
Further, AHFC will continue to enhance our long-standing commitment to support financial literacy education and ensure that the future generation of customers is well informed about the process of automobile finance.