GMAC: Dealer Financing Litigation Reaches Settlement
10 Februar 2004 - 9:53PM
PR Newswire (US)
GMAC: Dealer Financing Litigation Reaches Settlement DETROIT, Feb.
10 /PRNewswire/ -- General Motors Acceptance Corporation (GMAC)
today announced that a settlement agreement has been reached in the
litigation regarding dealer financing practices (Coleman, et al. v.
GMAC, U. S. District Court for the Middle District of Tennessee).
"The terms of the agreement preserve fair competition while taking
new steps to provide GMAC consumers with the knowledge to make the
most informed choice for their auto financing," said Greg Merryman,
attorney for GMAC. "GMAC will continue to provide its customers
with great value and fair treatment. It is a hallmark of our
company. We are proud of our commitment to diversity and our
dedication to creating an environment that enables our employees
and dealers to contribute fully toward the pursuit of total
customer satisfaction." The terms of the agreement include: -- A
new contract disclosure that will state: "The Annual Percentage
Rate may be negotiable with the Seller. The Seller may assign this
contract and retain its right to receive a part of the finance
charge." The disclosure will be placed on the front of all
contracts near the signature line and will take effect within 180
days of the settlement'sapproval by the court; -- The maximum
difference between the APR and the buy rate, for a period of three
years following the settlement's approval, will be equal to or less
than 2.5 percentage points, and for contracts with more than 60
monthly payments the maximum difference will be equal to or less
than 2 percentage points; -- GMAC will contribute $1.6 million
toward consumer assistance initiatives for the purpose of improving
the education of, and assisting consumers with respect to, credit
financing. Contribution recipients will be organizations focused on
African American and Hispanic outreach efforts; -- GMAC will
implement a new marketing initiative with the goal of reaching out
to African American and Hispanic consumers to generate 250,000
pre-approved offers of credit each year for the next five. If the
goal is not reached, GMAC will continue until 1.25 million offers
of credit have been issued; -- The credit offers will provide
eligible consumers with specific dollar amount pre-approval that
can be used to finance the purchase of a GM vehicle. Each credit
approval will be tied to a special rate purchase offer -- where
there would be no discretionary dealer finance income as part of
the financing contract; and -- There will be no payments to the
class members. Attorney fees for counsel of class members are
capped at $9 million and expenses are capped at $600,000 -- both
amounts must be approved by the Court. GMAC encourages consumers to
take advantage of these terms. In theextremely competitive auto
finance industry, consumers have many options including banks,
credit unions, and dealer financing. For nearly 90 years, GMAC has
helped millions of American consumers buy the cars they want to
drive. This settlement will allow GMAC to keep providing these
vital services and will further define GMAC as a true industry
leader. DATASOURCE: General Motors Corporation CONTACT: Dan McGinn
of The McGinn Group, +1-703-312-0140; Jim Farmer of GMAC,
+1-313-665-6091; or MarkTanner of General Motors, +1-313-665-3146
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