Daimler Settles Lending Bias Suit

DaimlerChrysler has agreed to settle a lawsuit in which its U.S. finance arm stood accused of discriminating against African Americans and Latinos by charging them more for car loans, according to federal court documents.

Under terms of the settlement, DaimlerChrysler Services North America will be required to offer several billion dollars in loans to blacks and Latinos based only on their credit history, according to plaintiffs’ attorneys.

A judge Tuesday gave preliminary approval to the settlement of the lawsuit, which was filed in a federal district court in New Jersey in 2000.

DaimlerChrysler did not immediately comment.

The automaker has agreed to issue 600,000 or 875,000 pre-approved loans -- depending on certain limits on interest rate increases -- to blacks and Latinos that will specify the interest rate to the borrower, court documents said.

The agreement also puts limits on the amount by which a dealer is permitted to increase the annual percentage rate on a customer’s loan, commonly known as the dealer markup.

Similar cases were brought against finance arms of General Motors Corp., Ford Motor Co., Nissan Motor Co. and Honda Motor Co., some of which were settled out of court.

DaimlerChrysler also will have to contribute $1.8 million to nonprofit groups for the purpose of consumer education and assistance, according to the agreement.