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Automobile financing has just become a little more equitable. In February, General Motors Acceptance Corporation (GMAC), the financial arm of car manufacturer General Motors Corporation, reached an agreement with a class of minorities who filed suit against the company in federal district court in Nashville in 1998. The group of African American and Hispanic plaintiffs alleged that GMAC’s credit pricing policy gave dealers the discretion to discriminate against minority groups through subjective markups. The policy changes outlined in the settlement could save consumers about $60 million a year. (This is only the second such settlement in the industry; in February 2003, Nissan Motor Acceptance Corporation, a much smaller company, settled a similar suit.) According to a 1999 study backed by the plaintiffs, African Americans listed as primary purchasers of cars were, on average, subject to higher interest rate markups than whites. (General Motors has disagreed with the study’s methodology.) As part of the settlement, GMAC has agreed not to buy any car contract from a dealership that has marked up the interest rate more than 2.5 percentage points above the rate approved by GMAC (2 percent on loans over 60 months). Additionally, GMAC will begin disclosing in its contracts that the annual percentage rate on auto loans is negotiable and may be marked up by the dealership. GMAC will also launch a diversity marketing initiative, contribute $1.6 million to fund consumer education programs, and pay attorneys’ fees up to $9 million. Litigation is pending against the credit divisions of Ford Motor Company, Chrysler Corporation, and Toyota Motor Corporation and the nine banks that make car loans. At press time the final approval hearing was set for March 29. For plaintiff Addie T. Coleman et al. Law Office of Clint W. Watkins (Brentwood, Tennessee): Clint Watkins. Watkins met the lead plaintiff in 1996, when a former law school professor suggested that he investigate a potential case for his former secretary. [See "Test-Driving a New Niche," page 44] Terry & Gore (Nashville): Michael Terry. Terry had worked with Watkins on previous matters. Gilmore Law Office (Grove Hill, Alabama): Wyman Gilmore. Bernstein Litowitz Berger & Grossmann (New York): Daniel Berger, Darnley Stewart, and associate Leah Guggenheimer. (Guggenheimer is now the director of marketing and business development at New York � based Darby & Darby.) Bernstein Litowitz was contacted by Watkins in 2000. National Consumer Law Center (Boston): Stuart Rossman. This nonprofit consumer advocacy group was contacted by Watkins. Grant, Klein & Roddy (Boston): Gary Klein. Klein was formerly a senior attorney at the National Consumer Law Center, and left to join Grant, Klein in 2001. For defendant General Motors Acceptance Corporation (Detroit) In-House: Attorney Robert Neaton. Weil, Gotshal & Manges (New York): Peter Cubita, Jay Fastow, Joseph Gelb, Scott Lassetter, and associates Lisa Cantos, August Horvath, David Lange, and Jason Varnado. (Lassetter and Varnado are in the firm’s Houston office.) GMAC is a long-standing client of the firm. Kirkland & Ellis (Chicago): Thomas Dutton and John Hickey, Jr. Kirkland has a long-standing relationship with the client. Baker, Donelson, Bearman, Caldwell & Berkowitz (Memphis): Andrew Colocotronis. (Colocotronis is in the firm’s Knoxville office.)

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