Six Chicago-area residents are suing DaimlerChrysler, claiming the company's financing arm denied them low-interest loans because they're black.
The lawsuit, filed Monday, Feb. 3, in U.S. District Court in Illinois, alleges that DaimlerChrysler Services North America LLC systematically denied low-interest financing to creditworthy customers from predominantly black neighborhoods shopping at two Chicago-area dealerships.
It also alleges that the company repossessed without justification vehicles financed by blacks. Lawyers for the six are seeking class-action status to represent all creditworthy blacks in Chrysler's Illinois sales zone.
James Ryan, spokesman for the finance arm, said the company is "outraged" by the allegations.
"We neither condone nor tolerate such practices within our organization," he said.
The lawsuit describes meetings in which "Chrysler executives disclosed - using racist slurs and derogatory comments - that Chrysler did not want to finance car purchases by blacks, claiming they are inherently higher credit risks," Steve Berman, a lawyer for the six, said in a statement.
Gerald Gorman, owner of Dodge of Midlothian and Marquette Chrysler Jeep and Sales, the two dealerships cited in the lawsuit, declined comment. Gorman sold the Marquette dealership last month.
Neither Gorman nor the dealerships are named as defendants in the suit. In fact, using the same lawyer as the six plaintiffs, Gorman has filed a separate lawsuit against the automaker alleging financial damage because of discriminatory lending practices.
The lawsuit by the six customers also alleges that Chrysler altered an automated computer program designed to evaluate customers objectively.
According to the suit, applications from the two dealerships were routed to Chrysler regional headquarters, where "virtually every credit application submitted by a black customer was denied financing regardless of credit scores."
The complaint alleges civil rights violations and fraud, and seeks unspecified punitive and other damages.
The financing units of Ford Motor Co., General Motors, Nissan Motor Co. Ltd. and Toyota Motor Corp. also have been sued over alleged discriminatory lending practices in recent years.
DaimlerChrysler Services spokesman Ryan said: "We are confident that our credit evaluation process treats all applicants fairly and lawfully."