Toyota Motor Credit Corp is the financing unit of Toyota, the world’s largest automaker, and has now come to the attention of US authorities for alleged discriminatory loan pricing.
According to the US regulators, the unit could be hit with an enforcement action because of the way it prices auto loans sent to its car dealerships and might be coerced to give back cash to borrowers or risk a penalty, said the company. The US Department of Justice and the Consumer Financial Protection Bureau sent a letter to Toyota Motor Credit on November 25, in which it claims that the division’s auto lending system “resulted in discriminatory pricing of loans to certain borrowers in contravention of applicable laws,” according to a filing with the U.S. Securities and Exchange Commission.
Toyota Motor Creidt, the lending arm of Japanese automaker Toyota Motor Corp, the biggest carmaker globally, could voluntarily agree to a deal with the two agencies – if it includes “monetary relief” next to the needed modifications to its loan pricing practices. On the other hand, the Justice Department and the CFPB are both ready to enforce punitive measures against the company if they don’t come to an amiable agreement.