Predatory Auto Lending
(cont'd)

Davis Signs Fair Lending Bill (cont'd)

As a result of litigation, many of the big auto lending arms, like the General Motors Acceptance Corporation and the Ford Motor Credit Company, have capped dealer markups at 3 percent.

And under terms of Nissan's settlement, the company agreed to offer preapproved loans to hundreds of thousands of minority customers and to limit markups. The company also donated $1 million to charity and paid $5,000 to $20,000 to each of the 10 plaintiffs.

Linda White of Murrieta, Calif., was not involved in the suit against Nissan and its finance arm, but she learned as a result of it that the interest rate on her 1996 Nissan Altima had been marked up 1.5 percentage points by a dealer in Oceanside, Calif.

Ms. White, who is African-American, said she did not know whether her race had been a factor in the decision to tack the extra charge onto her auto loan. But she said she welcomed the new California law, which will allow the authorities to track transactions like hers to see whether auto dealers are discriminating against black and Latino buyers.

"I don't think it's right for them to be able to do that without the consumer's knowledge," Ms. White said. "I felt taken by that, regardless of my race. That they could mark up my interest rate and not tell me, I just think that's wrong."