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July 29, 2015 8:21 PM ET

Consumer Finance

Company Overview of American Honda Finance Corporation

Company Overview

American Honda Finance Corporation provides various forms of financing to purchasers and lessees, and authorized independent dealers of Honda and Acura products in the United States and Canada. It acquires retail installment contracts from dealers; and closed-end vehicle lease contracts between authorized dealers and their customers, as well as offers wholesale flooring and commercial loans to authorized dealers of Honda and Acura products. The company also acquires financings of non-Honda and non-Acura used automobiles; and provides wholesale loans to non-Honda and non-Acura dealerships. In addition, it offers incentive financing programs for retail loans and leases of Honda and Acura produ...

20800 Madrona Avenue

Torrance, CA 90503

United States

Founded in 1980

1,369 Employees

Phone:

310-972-2555

Key Executives for American Honda Finance Corporation

President and Director
Principal Financial Officer, Vice President, Treasurer and Director
Principal Accounting Officer, Compliance Officer, Vice President of Finance & Administration and Assistant Secretary
Vice President, Risk Management Officer and Director
Manager of Treasury Department
Compensation as of Fiscal Year 2015.

American Honda Finance Corporation Key Developments

American Honda Finance Corp. Reaches $24 Million Settlement with Consumer Financial Protection Bureau and the Department of Justice on Charges That its Partnering Car Dealers Issued Loans with Disproportionately Higher Interest Rates to Minorities

American Honda Finance Corp. reached a $24 million settlement with authorities on charges that its partnering car dealers issued loans with disproportionately higher interest rates to minorities. The proposed settlements Honda reached with the Consumer Financial Protection Bureau and the Department of Justice are unusual in that they compel Honda to lower a cap imposed on dealers for pricing loans. The CFPB has urged other lenders to do so voluntarily to lower the risk of discriminatory pricing, but Honda's financing arm is the first to agree to such a move as part of an enforcement action. American Honda has also agreed to refund $24 million to affected borrowers. However, as a result of agreeing to the pricing change, the company will not pay a civil money penalty. The settlement is yet another move by the CFPB to reduce cases of "disparate impact," where minorities disproportionately pay more for loans even when lenders did not intend to discriminate. Specifically, authorities alleged American Honda afforded their partnering dealers too much pricing discretion. That, according to CFPB and DOJ, led to higher loan rates for thousands of African American, Hispanic and Asian and Pacific Islander borrowers when compared with rates for white borrowers, regardless of their credit profile and risk. The CFPB said minority borrowers with a Honda loan paid an average of $150 to $250 more since January 2011. Honda previously had allowed dealers to use what the CFPB calls "markups" to raise interest rates by as much as 2.25% on loans of five years or less, and 2% for longer terms, which is within the typical range for many major auto finance companies. The markups, which the industry calls dealer reserves, are designed to compensate the dealers and give them price discretion to cover risks that may not be solely based on the borrower's credit score. But under the settlement, Honda will lower those caps to 1.25% for loans of five years or less, and to 1% for longer loans. In a company-issued statement, Honda said it disagreed with the basis regulators used to determine that Honda borrowers were victims of disparate impact. However, the company said it would announce the adjusted cap to dealers later this year. The CFPB filed its order as an administrative action so it will be handled through an internal judicial process. The DOJ's proposed order was filed in the U.S. District Court for the Central District of California. Meanwhile, representatives of the car dealership industry blasted the Honda settlement. They have argued that the pricing caps actually give dealers more flexibility to lower consumer interest rates.

American Honda Finance Corporation Presents at 25th AFSA Credit Summit for Fixed Income Investors, May-27-2015 04:40 PM

American Honda Finance Corporation Presents at 25th AFSA Credit Summit for Fixed Income Investors, May-27-2015 04:40 PM. Venue: The Ritz-Carlton, Battery Park, Two West Street, New York, NY 10004, United States.

American Honda Finance Corporation Enters into the First Amendment to Credit Agreement

On March 5, 2015, American Honda Finance Corporation (AHFC) entered into the First Amendment to Credit Agreement (the First Amendment), among AHFC, the lenders party thereto and The Bank of Tokyo-Mitsubishi UFJ Ltd., as Administrative Agent and the other agents party thereto, amending its $3,500,000,000 five year unsecured revolving credit facility under its five year credit agreement, dated as of March 7, 2014 (the Five Year Credit Agreement). The first amendment extends the commitment termination date of the five year credit agreement from March 7, 2019 to March 7, 2020 (the Five Year Credit Agreement Termination Date).

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