The DOJ announced a settlement of the first “buy here, pay here” discriminatory auto-lending lawsuit. The complaint, filed in January, 2014 by the DOJ, the U.S. Attorney’s Office for the Western District of North Carolina and the North Carolina Attorney General in the U.S. District Court for the Western District of North Carolina, was against two North Carolina Auto Dealerships for allegedly engaging in discriminatory lending practices. Specifically, the complaint alleged that the lenders engaged in reverse redlining by unfairly targeting African Americans for extension of credit on predatory terms without meaningfully assessing the customer’s creditworthiness in violation of the Equal Credit Opportunity Act and the state’s Unfair and Deceptive Trade and Practices Act. The complaint also suggests that the dealerships repossessed borrowers’ vehicles upon the first missed payment, and gave loans to borrowers that frequently resulted in the borrower going into early default. The lenders denied wrongdoing, but agreed to the consent decree to avoid the cost of litigation. As relief, the lenders agreed to limit monthly payments to no more than 25% of the borrower’s income, requiring that interests rates be at least 5 percentage points below the state’s rate cap, and prohibiting hidden fees. The lenders also agreed to establish a $225,000 settlement fund to compensate victims.