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Racial Bias Lawsuits Filed Against 5 Captive Finance Arms

June 26, 2005

MILWAUKEE -- Five lawsuits have been filed in U.S. District Court against the captive finance arms of Ford, General Motors, Toyota, Honda and Nissan, alleging that these lenders allow dealerships to inflate interest rates without customers’ knowledge.

According to The Associated Press, the suits claim these markups are not based on credit rating and are higher for minorities.

Earlier this year, a judge in Tennessee ruled that Ford's financing arm had discriminated against black customers there. General Motors Acceptance Corp., Nissan Motor Acceptance Corp. and American Honda Finance Corp. all have settled other civil suits concerning discrimination in lending.

Ten dealers are mentioned in the Milwaukee suits, but have not been named as defendants, AP reported.

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Captives and Banks May Cease Leasing in R.I.

FARMINGTON HILLS, Mich. -- Chrysler Financial, Chase Auto Finance, Subaru Motors Finance and Ford Motor Credit have each announced they will stop leasing in Rhode Island beginning Aug. 1 if the current vicarious liability legislation passed two years ago lapses without being renewed by June 30.