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CFPB announced yesterday that it has resolved its actions against American Honda Finance Corp., noting the giant indirect lender will reduce dealer markups and pay $24 million in damages for discriminatory loan practices.

The bureau said Honda charged higher interest rates to thousands of African-Americans, Hispanics, Asian and Pacific Islander borrowers than it charged white borrowers from January 2011 through July 14, 2015 – on average, $150 to more than $250 more for their auto loans.

Under the CFPB order, Honda will significantly reduce dealer discretion, allowing interest-rate markups of only 1.25 percent for loans with terms of five or fewer years and 1 percent for loans with longer terms. Prior to the order, Honda permitted dealers to mark up loans as much as 2.25 percent for contracts of no more than five years and 2 percent on longer contracts.

Honda will also pay $24 million in damages to the affected borrowers.

CFPB issued a bulletin in 2013 that said indirect lenders, including credit unions, would be held liable for Equal Credit Opportunity Act violations of auto dealers, including violations arising from disparate impact. NAFCU steadfastly supports the enforcement of fair lending laws but it has raised concerns about actions that rely solely on the use of the disparate-impact theory of discrimination.