Report: Banks weighing auto-lending Racial Discrimination Suits

  • JP Morgan & Bank of America Charged Blacks More for Car Loans
Two major banks are discussing possible settlements of class action lawsuits filed by black consumers who contend they were charged more for auto loans than whites, according to a published report. Any settlement could affect the price of loans taken by millions of auto buyers, although no agreement appears to be near, The Wall Street Journal reported Monday, citing people familiar with the talks. Plaintiffs attorneys are asking the banks, Bank of America Corp. and J.P. Morgan Chase & Co.'s Bank One unit, to limit how much auto dealers can add onto the financing rates both banks charge, the newspaper reported. The lawsuits contend that dealers boost the cost of the loans more for black borrowers than for whites, and that the banks' policies allow for such discrimination. Bank of America declined to comment Monday to The Associated Press. A company spokeswoman, Shirley Norton, told the newspaper that the bank was "in talks" about the case, but declined to characterize the discussion as settlement talks or describe how far they had progressed. Tom Kelly, a spokesman for J.P. Morgan Chase in Chicago, said: "We are in discussions with plaintiffs' attorneys to resolve the litigation." The Journal said any settlement could lead to cheaper loans for all car buyers by curbing industry practices that - beyond the discrimination allegations - are legal in most states and burnish the dealers' bottom lines. [more]
  • BofA in talks over bias suit [more]