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Ford credit unit discriminated against blacks

A federal judge ruled Wednesday that an affiliate of the Ford Motor Credit Corp. discriminated against black customers by charging them higher rates on car loans.
/ Source: The Associated Press

A federal judge said Wednesday that the plaintiffs in a class-action suit had proved a lending affiliate of the Ford Motor Co. discriminated against black customers by charging them higher rates on car loans.

After a two-week trial, U.S. District Judge Aleta Trauger said she would rule against Primus Automotive Financial Services, a unit of the Ford Motor Credit Corp., but first would give the two sides 30 days to negotiate a settlement to end the discrimination.

“What I have decided is that the plaintiffs have proved their case and that they will win in my decision,” Trauger said.

The lawsuit lists 11 named plaintiffs, but attorneys said thousands of black customers were discriminated against and are included in the class. Attorneys said the customers were unfairly charged hundreds of thousands of dollars more than they should have been on car loans.

The plaintiffs sought an end to discriminatory practices rather than damages, but Primus must pay attorney fees.

Primus spokeswoman Meredith Libbey said the company disagreed with the judge’s conclusions. “We uphold the highest standards of fair lending,” Libbey said in a statement.

Lead plaintiff lawyer Clint Watkins declined to comment.

Ford Motor Credit also offers car loans under several other brands, including Jaguar Credit, Volvo Car Finance, Mazda American Credit and Land Rover Capital Group.

Several lawsuits alleging discrimination against blacks have been filed against financing companies for various automakers nationwide since 1998, resulting in five out-of-court settlements. The class-action suit against Primus was the first to go to trial.

The settlements in the other cases have included company agreements to place caps on the interest rate markups that dealers can make on loans.