Class action against captive lenders denied

Federal judges have handed setbacks to Hispanic and black consumers suing Ford Credit and GMAC on charges of inflating loan interest rates.

U.S. District Judge Suzanne Conlon in Chicago for the second time denied a request for class-action status in a suit against Ford Credit by Rudi Rodriguez.

A Nashville, TN suit against GMAC on behalf of Addie Coleman, a black, was initially approved for class-action status in the district court. But the U.S. Sixth Circuit Court of Appeals in Cincinnati overturned that.

The “class” sought for the Coleman suit would have covered thousands of black customers in Tennessee. The motion in the Rodriguez Chicago litigation asked that the “class” include more than one million Hispanic customers of Ford since 1990.

A study of Ford Credit loans to Hispanic customers in the Rodriguez case contended they were charged $266 more per transaction on average than white purchasers. This allegation is the core issue for the GMAC case in Nashville, as well as one against Nissan Motor Acceptance in Nashville and another suit against Ford Credit in New York City.

Rodriguez alleges he bought a 1999 Ford Escort and was charged 18.95% interest, comparable to subprime loan rates.

The captive lenders deny discrimination in setting interest rates. Nissan's response in the Nashville case said any above-average rates may have been set by dealers.