DETROIT General Motors' financing arm reaches initial deal in racial bias

DETROIT (AP) -- The financing arm of General Motors Corp. said Friday it has reached a tentative settlement with plaintiffs in a six-year-old class action lawsuit charging racial bias in lending policies.
The suit, filed in 1998 on behalf of a group of plaintiffs in Tennessee, alleged that as a result of General Motors Acceptance Corp.'s policies, dealers routinely charged black consumers higher interest rates on auto loans than whites with similar financial histories.
GMAC, the nation's second-largest auto lender, said in a statement that it had reached a tentative agreement with the plaintiffs but declined to provide details, saying the deal was not yet finalized and still needed court approval. It said only that the settlement would "preserve fair competition, appropriate dealer flexibility, and consumer choice."
Some provisions
The Wall Street Journal reported Friday that, as part of the deal, GMAC has offered to put tighter limits on dealer increases on interest rates set by GMAC. The lender also is expected to agree to more complete disclosure to customers and changes in the way it compensates dealers for arranging loans, the newspaper said.