DaimlerChrysler has agreed to settle a lawsuit in which its U.S. finance arm stood accused of discriminating against African Americans and Hispanics by charging them more for car loans, according to federal court documents.
Under terms of the settlement, DaimlerChrysler Services North America LLC will be required to offer several billion dollars in loans to black and Hispanic people based only on their credit history, according to plaintiffs' attorneys.
A judge on Tuesday gave preliminary approval to the settlement of the lawsuit, which was filed in a federal district court in New Jersey in 2000.
A call to a DaimlerChrysler spokeswoman was not immediately returned.
The automaker has agreed to issue 600,000 or 875,000 pre-approved loans — depending on certain limits on interest rate increases — to black and Hispanic people that will specify the interest rate to the borrower, court documents said.
The agreement also puts limits on the amount a dealer is permitted to increase the annual percentage rate on a customer's loan, commonly known as "dealer markup."
Similar cases were brought against finance arms of General Motors Corp., Ford Motor Co., Nissan Motor Co. Ltd. and Honda Motor Co. Ltd., some of which were settled out of court.
DaimlerChrysler will also have to contribute $1.8 million to certain nonprofit groups for the purpose of consumer education and assistance, according to terms of the agreement.
