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Toyota to pay $21.9 million to settle bias case

Toyota cars are on display in the showroom of Hollywood Toyota dealership in Los Angeles, California.
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Toyota cars are on display in the showroom of Hollywood Toyota dealership in Los Angeles, California.

Toyota is set to fork over up to $21.9 million to settle allegations that it discriminated against black and Asian borrowers by charging them higher rates than white borrowers, the Los Angeles Times reported.

Federal regulators cracking down on predatory auto lending practices had been investigating the auto company's financing arm, Toyota Motor Credit, since 2013.

The Department of Justice and Consumer Financial Protection Bureau said Toyota dealerships had hiked up interest rates for black and Asian consumers taking out auto loans.

"No consumer should be forced to pay more money for a loan because of their race or national origin," U.S. Attorney Eileen M. Decker of the Central District of California said in a statement.

Toyota Motor Credit said it will cap how much dealerships can mark up interest rates and set aside $2 million to compensate new borrowers until it can put in controls against overcharging.

The company said in a statement that it "does not tolerate discrimination of any kind, even perceived or unintentional, from its employees or business partners."

For more on the Toyota settlement, see the full story at the Los Angeles Times.