May 9, 2005
A landmark ruling against Primus Financial Services Inc., a subsidiary of Ford Motor Corp., that found racial bias in dealership markups of vehicle loans is back before a federal judge for remedies after the parties to a class action lawsuit failed to agree on a settlement.
U.S. District Judge Aleta Trauger in Nashville, ruled in March that Primus allowed dealerships to mark up wholesale interest rates on vehicle loans it provided them.
Some of those dealerships charged black customers more than comparable white buyers, the plaintiffs alleged. Ford and Primus have imposed a voluntary ceiling of 2.5 percentage points on rate markups. But Primus argued at trial it does not control individual dealerships' markup policies.
Trauger said in her ruling that the plaintiffs proved their case and she ordered the two sides to try to reach a settlement by April 25. They failed to do so, although a Ford spokeswoman says Primus "did follow the judge's instructions."
There was no indication when Trauger would announce remedies in the case.
Several banks and finance companies have settled similar lawsuits by agreeing to limit rate markups. The Primus lawsuit is the first to go to trial.
