From The News and Observer
NASHVILLE, TENN — A federal judge ruled Wednesday that a lending affiliate of the Ford Motor Co., the second biggest U.S. automaker, discriminated against black customers by charging them higher rates on car loans.
After a two-week trial, U.S. District Court Judge Aleta Trauger ruled against Primus Automotive Financial Services, a unit of Ford’s Ford Motor Credit Corp. business, in the class-action lawsuit.
Those who filed suit said they were unfairly charged hundreds of thousands of dollars more than they should have been on loans.
Trauger ordered both sides to negotiate for 30 days to agree on a remedy to end the discrimination. Primus has to pay attorney fees, but the plaintiffs were not seeking damages in the case.
Since 1998, there have been several lawsuits filed against auto financing companies, alleging discrimination against blacks. Those suits have resulted in five out-of-court settlements. The class-action suit against Primus was the first to go to trial.
The settlements in other cases have included the companies placing caps on the interest rate markups that dealers can make to loans and establishing “affirmative lending” programs for minority customers.
Marking up a loan is a practice in which dealers add percentage points of interest to a loan and, in agreement with the finance company, get to keep most of the extra interest money.
Ford shares fell 32 cents to $11.91 in afternoon trading on the New York Stock Exchange.
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