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DaimlerChrysler settles discrimination lawsuit

July 26, 2005

DETROIT (Reuters) – 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.




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