NEW YORK -- General Motors Acceptance Corp., the financing arm of General Motors Corp., is close to settling a class-action suit alleging its auto-lending policies harm black car buyers, the Wall Street Journal said on Friday.
GMAC representatives could not immediately be reached for comment.
As part of a tentative pact with African-American plaintiffs, GMAC has offered to put tighter limits on the increases car dealers can impose on interest rates set by GMAC, the paper said, citing people familiar with the situation.
The move could save consumers millions of dollars a year, it said.
The newspaper said that currently GMAC allows dealers to add as much as three percentage points to the annual interest rate that GMAC would offer to the consumer based on credit worthiness. The suit, it said, alleges that dealers tend to mark up loans more frequently and aggressively with blacks than with whites.
According to the newspaper, terms for a settlement -- which may be announced as early as next week -- are expected to include the lender agreeing to more complete disclosure to customers, as well as changes in how GMAC compensates dealers for arranging loans.