CFPB Orders Honda’s Auto Financing Arm to Pay $12.8 Million for COVID-19 and Other Credit Reporting Failures — WA (2025)
The CFPB ordered Honda's auto financing arm to pay $12.8 million for credit reporting failures related to COVID-19 and other issues, according to the Consumer Financial Protection Bureau. This consumer finance case differs from typical Washington employment cases, which have a median settlement of $0.
Opening Summary
In August 2025, the Consumer Financial Protection Bureau ordered Honda's auto financing arm to pay $12.8 million for failures in credit reporting practices, particularly related to COVID-19 relief programs and other reporting violations.
Case Background
This enforcement action targeted Honda's automotive financing division for systematic failures in credit reporting practices that affected consumers' credit histories and scores. The case emerged from the CFPB's ongoing oversight of auto lenders and their compliance with credit reporting requirements, particularly during the COVID-19 pandemic when many consumers faced financial hardships.
Honda's financing arm, like many auto lenders, was required to implement specific protocols for reporting consumer payment information to credit bureaus, especially when consumers enrolled in COVID-19 relief programs or other forbearance arrangements. The company's failures in these areas came to light through consumer complaints and regulatory examinations that revealed patterns of inaccurate credit reporting.
The timing of this action reflects the CFPB's continued focus on ensuring that financial institutions properly handle credit reporting obligations, particularly in circumstances where consumers are experiencing financial distress. Auto financing represents a significant portion of consumer credit, making accurate reporting in this sector crucial for maintaining the integrity of the credit reporting system.
Key Allegations / Claims
The primary allegations centered on Honda's financing arm's failure to accurately report consumer account information to credit reporting agencies. Specifically, the company allegedly failed to properly report when consumers were enrolled in COVID-19 relief programs, which should have been reflected in their credit reports to prevent negative impacts on credit scores during the pandemic.
Additional claims included systematic failures in the company's credit reporting processes that extended beyond COVID-19 related issues. These failures allegedly resulted in inaccurate information being transmitted to credit bureaus, potentially harming consumers' creditworthiness and ability to obtain future credit on favorable terms.
The CFPB's investigation revealed that these reporting failures were not isolated incidents but represented systemic deficiencies in the company's credit reporting infrastructure and compliance procedures. The agency determined that Honda's financing arm lacked adequate systems and controls to ensure accurate and timely reporting of consumer account status, particularly during periods when consumers were experiencing financial difficulties and were enrolled in relief programs.
Resolution & Amount
The case was resolved through a consent order requiring Honda's auto financing arm to pay $12.8 million in penalties and remediation. This resolution represents an enforcement action rather than a negotiated settlement, with the CFPB imposing specific requirements on the company to address the identified violations.
The monetary penalty is designed to both punish the company for its failures and deter similar violations by other auto lenders in the industry. In addition to the financial penalty, the order likely includes requirements for the company to implement corrective measures, improve its credit reporting systems, and provide remediation to affected consumers.
The resolution also typically includes ongoing compliance monitoring and reporting requirements to ensure that the company addresses the systemic issues that led to the violations and maintains proper credit reporting practices going forward.
Applicable Law / Enforcement
This enforcement action falls under the Consumer Financial Protection Bureau's authority to regulate credit reporting practices and ensure compliance with federal consumer financial laws. The relevant legal framework includes the Fair Credit Reporting Act (FCRA), which governs how consumer credit information is collected, reported, and used.
The CFPB's enforcement authority extends to auto lenders and their credit reporting obligations, particularly regarding accuracy and timeliness of information provided to credit bureaus. During the COVID-19 pandemic, specific guidance was issued regarding how lenders should report accounts for consumers enrolled in relief programs to prevent unwarranted negative credit impacts.
The Consumer Financial Protection Act provides the CFPB with broad supervisory and enforcement powers over financial institutions, including the ability to impose civil money penalties for violations of federal consumer financial laws. This case demonstrates the agency's commitment to holding auto lenders accountable for credit reporting failures that can significantly impact consumers' financial lives.
Context & Benchmarks
Statewide benchmarks for this case type are not currently available in our database. However, this penalty amount reflects the CFPB's approach to addressing systemic credit reporting failures in the auto lending industry, particularly those that occurred during the COVID-19 pandemic when accurate reporting was crucial for consumers facing financial hardship.
Sources
This analysis is for informational purposes only and does not constitute legal advice. Individuals seeking legal guidance should consult with qualified legal professionals.
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FAQ
What types of employment cases can result in $24 million settlements in Washington state?
Large employment settlements in WA typically involve class action lawsuits for wage theft, systematic discrimination, sexual harassment, wrongful termination of multiple employees, or violations of Washington's employment laws affecting many workers over extended periods.
How are $24 million employment settlements typically distributed among plaintiffs?
Distribution depends on the case specifics, but generally follows factors like length of employment, salary levels, extent of damages suffered, and legal fees. In class actions, the court must approve the distribution plan to ensure fairness among all affected employees.
What Washington state employment laws commonly lead to multi-million dollar cases?
Major cases often involve violations of the Washington Minimum Wage Act, overtime laws, the Washington Law Against Discrimination (WLAD), Family and Medical Leave Act, and workplace safety regulations that affect large numbers of employees.
How long do large employment cases typically take to resolve in Washington?
Complex employment cases resulting in $24 million settlements usually take 2-5 years to resolve, depending on the number of plaintiffs, complexity of claims, discovery process, and whether the case goes to trial or settles during litigation.
What should employees do if they believe they're part of a large-scale employment violation?
Employees should document all relevant incidents, preserve communications, contact an experienced employment attorney, and may need to file complaints with the Washington State Department of Labor & Industries or EEOC within statutory deadlines.
This content is for informational purposes only and is not legal advice.