The pricing of auto loans through dealerships by Toyota Motor Credit Corp., the lending arm of Toyota Motors Corp., could lead to an enforcement action from U.S. authorities, the company said.
The possible action could force the company to reimburse borrowers or lead to a fine.
Ally Financial Inc. last December was forced to pay $98 million to resolve similar discriminatory loan pricing charges from the U.S. Department of Justice and the Consumer Financial Protection Bureau.
The Justice Department and CFPB last week sent a letter to Toyota Motor Credit, stating that its auto lending practices "resulted in discriminatory pricing of loans to certain borrowers in contravention of applicable laws," the company said in a filing with the U.S. Securities and Exchange Commission.
The Justice Department and the CFPB are prepared to bring an enforcement action, the filing said, unless Toyota Motor Credit agrees to a resolution with the agencies voluntarily, including possibly changing its loan pricing policies.
Toyota Motor Credit officials said the company would work with the agencies to reach a resolution.
In April, BMO Harris announced that it was switching to a flat-fee pricing structure, in a move that drew praise from the CFPB.
Discretionary markups are just one area in which auto lenders are facing scrutiny from regulators. The Justice Department, the SEC and the New York District Attorney's Office have all opened inquiries related to subprime auto lending.
Fifth Third Bancorp and Honda's finance arm have also disclosed receiving similar requests for information.