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Compliance

CFPB, DOJ Now Targeting Honda's Captive

December 04, 2014

TORRANCE, Calif. — In a recent regulatory filing, American Honda Finance Corporation (AHFC) revealed that the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Justice (DOJ) have authorized enforcement actions against its captive finance arm.

According to the finance source's Dec. 2 filing with the Securities and Exchange Commission, the CFPB and DOJ are alleging discrimination in automobile loan pricing to certain borrowers by dealers and that the loan pricing disparities were caused by AHFC’s business practices related to dealers.

“AHFC has also been informed that the agencies may defer pursuit of this litigation if AHFC works with the agencies to seek a voluntary resolution to these allegations,” the filing read, in part. “The agencies have informed AHFC that they are seeking monetary relief and implementation of changes to AHFC’s pricing practices and policies, [changes that] could affect AHFC’s business.

"AHFC intends to continue to cooperate with the Agencies to find a mutually agreeable resolution.”

Late last week, Toyota Motor Credit Corp. issued a similar regulatory filing, stating that the CFPB and DOJ are poised to take enforcement action against Toyota’s finance arm. The captive also said it intends to cooperate with the agencies' investigation.

The CFPB declined to comment on either case when contacted by F&I and Showroom.

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