QUOTE OF THE DAY “The sense of urgency is definitely elevated.
There is just a smaller shopping window than usual for a lot of people.” Lee Fannon, Chenal Parkway Best Buy general manager, on last minute Christmas shoppers Article, 1D
Ally to settle loan-discrimination case
WASHINGTON - Ally Financial Inc. is paying $98 million to resolve U.S. government claims that it illegally charged higher auto-loan rates to buyers from minority groups than whites with similar credit histories.
The agreement announced Friday by the Justice Department and the Consumer Financial Protection Bureau is the government’s biggest auto-loan discrimination settlement to date.
Ally is paying $80 million in damages to about 235,000 black, Hispanic, Asian and Pacific Islander borrowers, and $18 million in penalties.
Ally doesn’t make auto loans directly to consumers; it buys the loan contracts made by auto dealers. Ally sets an interest rate for the loans and allows dealers to charge customers a higher rate.
Ally said it sets rates based only on borrowers’ credit and that it doesn’t practice or condone discrimination.
Bank strikes deal in mortgage dispute
McLEAN, Va. - Deutsche Bank will pay $1.92 billion to settle a mortgage-backed securities dispute with the Federal Housing Finance Agency on behalf of Fannie Mae and Freddie Mac.
The agency, which oversees the two government-controlled mortgage finance companies, sued 17 financial institutions over their sales of mortgage securities to Fannie Mae, the Federal National Mortgage Association, and Freddie Mac, the Federal Home Loan Mortgage Corp., that soured when the housing market collapsed.
The Federal Housing Finance Agency alleged that between 2005 and 2007, Deutsche Bank did not provide adequate disclosure about some residential mortgage-backed securities sold to Fannie Mae and Freddie Mac.
The agreement announced Thursday resolves Deutsche Bank’s largest mortgage-related litigation case. It also includes an agreement to resolve past and future claims that seek Deutsche Bank to repurchase mortgage loans tied to some of the disputed securities.
“This settlement is another important step in our efforts to recover funds for the nation’s taxpayers,” Freddie Mac Chief Executive Officer Donald Layton said in a statement.
Deutsche Bank has exited the mortgage businesses that gave rise to the claims.
- The Associated Press
Fiat restarts talks to buy Chrysler stake
Fiat S.p.A. Chief Executive Officer Sergio Marchionne restarted negotiations with a United Auto Workers trust to buy the remaining shares of Chrysler Group LLC, three people familiar with the matter said Friday.
With an initial public offering of Chrysler on hold, Fiat executives met this week with representatives of the retiree health-care trust, said two of the people, who asked not to be identified because the talks are private.
The meeting came after the trust’s rejection of a higher offer for its 41.5 percent stake in Chrysler earlier this month, the people said. The proposal was the first made by Fiat since August, one person said.
“Marchionne needs a deal to avoid an IPO, as that may lead to Fiat paying top dollar for Chrysler,” said Vincenzo Longo, analyst at IG in Milan. “Investors would appreciate a compromise between the trust’s demands and Fiat’s offer.”
A long-running dispute over the value of the holding prompted the union trust to force Auburn Hills, Mich.-based Chrysler to pursue an IPO. The stock-sale process is meant to set a market value for the third-largest American automaker.
That process has stalled for tax reasons, pushing a potential listing into 2014.
China rejects modified corn from U.S.
BEIJING - China said the country isn’t ready to import a variety of corn genetically modified for insect resistance, after 12 batches containing the so-called MIR 162 grain from the U.S.
were rejected.
The MIR 162 corn “hasn’t received safety certification, so it cannot be imported,” Vice Minister Niu Dun said at a news conference in Beijing at the conclusion of the U.S.-China Joint Commission on Commerce and Trade. Niu was speaking after talks attended by officials including U.S. Agriculture Secretary Tom Vilsack.
As of Thursday, 12 shipments of U.S. corn totaling 600,760 tons were found with MIR 162 and rejected, according to China’s quarantine authority. More refusals may cut shipments to the world’s second-biggest economy, which had placed a record order of 5.9 million tons this year.
“It’s certain now that China won’t allow this variety anytime soon,” Li Qiang, the chairman of Shanghai JC Intelligence Co., said from Shanghai.
- The Associated Press
Hong Kong firm to buy 21 Boeing 777Xs
CHICAGO - Boeing has booked a big order for its planned 777X aircraft.
Hong Kong airline Cathay Pacific is buying 21 of the planes, which Boeing will build later this decade.
The 777X will be an updated version of Boeing’s best-selling 777. That is Boeing’s second-biggest plane, used by airlines for long international flights. For the new version, Boeing plans to replace its aluminum wings with wings made from a lightweight, high-tech plastic, and make other improvements that will make a more fuel-efficient plane.
Boeing has booked orders for 259 of the planes, worth a total of $95 billion at list prices.
Boeing builds the current 777 in Everett, Wash., but it is still deciding where it will build the 777X.
- The Associated Press
Premium products boost Nike’s profit
Nike Inc., the world’s largest sporting-goods company, posted a second-quarter profit that topped analysts’ estimates as higher-priced shoes led in sales.
Net income in the three months through November rose 40 percent to $537 million, or 59 cents a share, from $384 million, or 42 cents, a year earlier, the Beaverton, Ore.-based company said Thursday in a statement after the market closed. Profit excluding some items was 59 cents a share. The average of 24 analysts’ estimates compiled by Bloomberg was 58 cents.
Chief Executive Officer Mark Parker has been introducing premium products that sell for higher prices, such as $160 Flyknit running shoes and $225 Hypervenom soccer boots, while bolstering the company’s online business. Nike’s gross margin, the percentage of sales left after subtracting the cost of goods sold, expanded 1.4 percentage points to 43.9 percent.
Nike fell 1.6 percent to $77.02 at 9:47 a.m. in New York.
Sales rose 8 percent to $6.43 billion. Analysts projected $6.44 billion, on average.
- Bloomberg News
Business, Pages 28 on 12/21/2013