Honda’s American finance arm has reached a settlement with the Consumer Financial Protection Bureau over allegations of discriminatory loan practices.
The company has agreed to establish a $24 million fund that will be used to compensate customers that were identified by CFPB and Department of Justice investigations.

Government officials have warned of widespread discrimination against minority buyers, many of whom have allegedly been quoted much higher interest rates than other potential buyers with similar qualifications. Persuading a customer to sign a loan with an inflated “dealer markup” rate is not itself illegal, however the CFPB claims minorities are disproportionately targeted by such schemes.

“Honda’s past practices resulted in thousands of African-American, Hispanic, and Asian and Pacific Islander borrowers paying higher interest rates than white borrowers for their auto loans, without regard to their creditworthiness,” the CFPB said in a statement.

American Honda Finance Corporation is not the first automotive lender to be targeted in the CFPB and DoJ crackdown campaign. Ally Financial, formerly General Motors’ captive lending arm, agreed to a $98 million settlement in 2013, while Toyota Motor Credit faced similar accusations.

Aside from the compensation fund, AHFC has promised to lower dealers’ discretionary markup cap from 2.25 percent to a maximum of 1.25 percent above the ‘buy’ rate, theoretically limiting pricing disparities. The company also has the option of transitioning to a compensation system that removes dealer discretion altogether.

“AHFC has a difference of opinion with the CFPB and the DOJ regarding the methodology used to make determinations about lending practices,” the company said in a statement. “But we nonetheless share a fundamental agreement in the importance of fair lending.”

The CFPB decided not to assess additional penalties, citing Honda’s “responsible conduct” and “proactive steps” to address the issue.

General Motors has announced its biggest factory investment so far this year, allocating $1.4 billion to improve its Arlington Assembly Plant in Texas.
The facility will receive an entirely new paint shop and body shop, with many other upgrades to the existing assembly area. Construction will be spread across three years, enabling existing production tasks to be run uninterrupted.

The Arlington plant currently builds several full-size SUVs for various brands including the Cadillac Escalade, the GMC Yukon and Yukon XL, and the Chevrolet Tahoe and Suburban. The factory built its 10 millionth vehicle this year, the latest milestone in more than 60 years of continuous operation.

Including today’s announcement, the plant will have received nearly $2 billion in improvements since 2011 as the company continues to introduce new vehicles and refine manufacturing processes. The latest announcement represents a sizable portion of GM’s broader $5.4 billion investment in US manufacturing over the next three years.

The company expects to begin construction at the Arlington factory within the next few months.

General Motors recalled about 200,000 units of its Hummer H3 utility vehicle earlier this month over a fire risk, but a new report indicates the auto giant dragged its feet for years on the problem and only issued the safety campaign after receiving significant pressure from the federal government.
GM issued the recall for 196,000 H3 SUVs and H3T pickup trucks on July 8th, but Jalopnik, citing inside sources at the National Highway Traffic Safety Administration, claims the Detroit automaker has been aware of the problem since at least August 2008. Since that first incident there have been a total of 73 complaints involving the H3′s blower mower, ranging from smoldering dashes to vehicle fires.

The safety issue slipped between the cracks because it falls on automakers to self report any safety defects to the NHTSA. GM essentially sat on the information for more than six years, waiting until January of this year to report the potential problem to the NHTSA.

Once brought to its attention, the NHTSA noticed that the number of complaints GM reported didn’t match the number of complaints it had in its system. Jalopnik notes that it’s unclear if it was a case of miscounting on GM’s part or if the auto giant wasn’t privy to some of the complaints in the NHTSA’s database.

At any rate, GM was said to be reluctant to issue a recall until it received this ultimatum from the NHTSA — either issue a recall or face a formal investigation. GM chose the former.

The report is particularly shocking given GM’s history of delaying critical recall campaigns. Most recently GM failed to recall cars it knew to have faulty ignition switches. The company’s failure to act in the ignition switch case resulted in 100 deaths and thousands of injuries.

Photo by Mark Elias.

Audi is reportedly preparing to upgrade the S4‘s engine for the next generation, likely to debut in the not-too-distant future.
Engineers are believed to be keeping the 3.0-liter supercharged TFSI V6 mill from the current B8 generation, but retuned and tweaked to deliver at least 350 horsepower, according to Car and Driver.

The revision would provide a modest increase over the current edition, which boasts 333 ponies and 325 lb-ft of torque. Extra power would also help the sport sedan compete against the latest German rivals, while providing a wider margin against Audi’s own S3.

Visually, the new S4 will presumably follow the same direction taken by its less athletic counterpart, the 2017 A4 (pictured in gallery). Despite a larger footprint and slightly longer wheelbase, the redesigned A4 is more than 250 pounds lighter than its predecessor.

The company is also working on the range-topping RS 4, which will swap its current 4.2-liter V8 powerplant for a V6 mill. Turbocharging, perhaps electrically-assisted, promises to give the downsized engine a noticeable output advantage over the naturally-aspirated unit.

Reports suggest Audi will launch the upgraded S4 and RS 4 shortly after the new A4 arrives in showrooms, potentially shipping all three next year for the 2017 model year.

Acura has released a highlight video showing the new NSX in action at the annual Pikes Peak International Hill Climb.
The pre-production prototype was outfitted with a racing-inspired livery, however it was actually serving as the official pace car for the event.

Honda public-relations manager Sage Marie was an appropriate choice to make the first run up the mountain, drawing upon his experience competing in the 2013 and 2014 climbs among a handful of other Honda employees.

“As the pace car, the beast that is NSX will not be fully let of its cage, but fans and drivers will still get a first glimpse of the unique character, performance and handling of the NSX in a one-of-a-kind racing environment,” Mike Accavitti, Acura’s senior VP and general manager, said in a statement ahead of the event last month.

The company captured the run via car-mounted cameras, dozens of stationary roadside cameras and a helicopter for an aerial perspective.

Unveiled early this year in Detroit, the 2016 NSX showcases Acura’s most advanced technologies and latest design language. A mid-mounted twin-turbo V6 engine powers the rear wheels, while two electric motors provide instantaneous and independent torque control for the front wheels.

The NSX is expected to arrive in showrooms before the end of the year, likely with a price tag around $150,000.