Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau


Get updates by email

RSS Subscribe to this blog's feed
Twitter Follow us on Twitter

Contributors

Showing 10 posts in Auto Finance.

Surge in Subprime Auto Lending Prompts Government Concerns

Auto finance companies have witnessed a surge in lending activity, a sign that the economy is gradually improving. However, government agencies are identifying and taking action to address increased lending at high interest rates to borrowers with poor credit, similar to lending practices that were the basis for subprime mortgage lending less than a decade earlier. Read More ›

The CFPB Publishes a Final Rule Defining “Larger Participants” in the Consumer Automotive Financing Market

The Dodd-Frank Act grants the Consumer Financial Protection Bureau the authority to supervise any “larger participant of a market” for non-mortgage financial products or services. 12 U.S.C. § 5514(a)(1)(B). On June 10, 2015, the Consumer Financial Protection Bureau published a new rule granting the CFPB supervisory authority over any nonbank auto finance company that makes 10,000 or more annual originations. According to the Bureau, the purpose of the rule is to “ensure that larger auto finance companies treat consumers fairly.” Read More ›

CFPB Continues Increased Scrutiny of Auto-Lending Financers Even as Congress Attempts to Rein It In

In March 2013, the CFPB released industry guidance regarding auto financing interest rates and dealership reserves. On September 8, 2014, Congress finally took steps to nullify this guidance.  Read More ›

CFPB Presents Annual Fair Lending Report to Congress

On April 30, the Consumer Financial Protection Bureau (the CFPB) presented its annual Fair Lending Report to Congress.  The Fair Lending Report details the CFPB’s actions and initiatives during 2013. In particular, the Report reveals how the CFPB makes enforcement decisions and includes examples of several of the CFPB’s enforcement actions from past year.  Read More ›

Congress Presses the CFPB on Auto Finance Oversight

On March 7, 2014, the House Financial Services Committee sent the CFPB a terse letter demanding an explanation of the CFPB’s methodology for determining discriminatory practices in the automotive finance industry. The CFPB was asked to respond by March 13, but the Committee reports that no response has been received. The Committee’s interaction with the CFPB comes in the wake of an increase in the number of automotive finance lenders under review since the beginning of 2013. Read More ›

Looking Ahead To 2014: Auto Finance and The CFPB

The impact of the Consumer Financial Protection Bureau’s reach on the automotive finance industry remains a significant issue as 2014 approaches. Several of the largest lenders in the automotive finance industry were under review by the CFPB in 2013, according to filings with the Securities and Exchange Commission. The increase in reviews, and the concerns the CFPB has expressed with regard to the practices of automotive finance lenders and car dealers, is likely to cause the industry to watch for more guidance from the CFPB in 2014.  Read More ›

Senators Demand Answers Regarding CFPB’s Guidance Targeting Indirect Auto Lenders

On Wednesday (October 30, 2013), a bipartisan group of twenty-two U.S. Senators—11 Democrats and 11 Republicans—asked the Consumer Financial Protection Bureau (CFPB or Bureau) to provide details concerning the methodology used by the Bureau in issuing its March 21, 2013 bulletin concerning “Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act.” Read More ›

CFPB Probes Auto Lenders Over Extended Warranty And Other Ancillary Products

The CFPB has subpoenaed a number of auto lenders concerning the sale of financial products such as extended warranties, according to a report in the May 2, 2013 edition of the Wall Street Journal.  Consumer advocates have long criticized what they perceive to be excessive use of high-cost ancillary products to boost profits for car dealers.  Although there is nothing illegal about any of these products, and many provide significant benefits to consumers, we nonetheless expect the CFPB to use its UDAAP powers to deem certain of these practices “abusive,” and to use fair lending-based methodologies to argue that these sales have a disparate impact on certain protected classes.  When combined with the CFPB’s March 2013 guidance on indirect auto lending, which we discuss here, the CFPB is demonstrating that auto lending will be an area of significant enforcement activities in the months to come.  

Stay tuned to the CFPB-Lawblog's continuing coverage of the CFPB's activities involving auto financing.
 

CFPB Probes Auto Lenders Over Extended Warranty And Other Ancillary Products

The CFPB has subpoenaed a number of auto lenders concerning the sale of financial products such as extended warranties, according to a report in the May 2, 2013 edition of the Wall Street Journal.  Consumer advocates have long criticized what they perceive to be excessive use of high-cost ancillary products to boost profits for car dealers.  Although there is nothing illegal about any of these products, and many provide significant benefits to consumers, we nonetheless expect the CFPB to use its UDAAP powers to deem certain of these practices “abusive,” and to use fair lending-based methodologies to argue that these sales have a disparate impact on certain protected classes.  When combined with the CFPB’s March 2013 guidance on indirect auto lending, which we discuss here, the CFPB is demonstrating that auto lending will be an area of significant enforcement activities in the months to come.  

Stay tuned to the CFS-Lawblog's continuing coverage of the CFPB's activities involving auto financing. 
  

ECOA Redux: CFPB Targeting Indirect Auto Lenders For Alleged Discriminatory Practices By Dealers

Today (March 21, 2013), the CFPB released a bulletin warning indirect auto lenders that the Bureau intends to “pursue” -- under the federal Equal Credit Opportunity Act (ECOA) -- those that fail to impose proper “controls” on dealer markups and allow dealer pricing discretion that the CFPB deems discriminatory to protected classes. Read More ›