In February 2023, the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) announced an auto finance data pilot, where it ordered nine large auto lenders to provide information about their auto lending portfolios. These lenders consisted of banks, finance companies, and captive lenders (manufacturer-owned finance companies that generally provide below-market interest rate auto financing to consumers).… Continue Reading
Auto Finance
FTC, State of Arizona Charge Auto Dealership with Deceiving Consumers
Posted in Auto Finance, FTC Enforcement
On August 15, 2024, the Federal Trade Commission (“FTC”) and Arizona Attorney General announced a proposed settlement with an Arizona-based vehicle dealership to resolve allegations that the dealership misrepresented prices in online advertisements, engaged in unfair and deceptive practices related to the sale of add-on products, and discriminated against Latino consumers by charging higher interest rates and more expensive add-on charges.… Continue Reading
Fifth Circuit Court of Appeals Schedules Oral Arguments in CARS Rule Challenge for Oct 7
Posted in Auto Finance, FTC
The Fifth Circuit Court of Appeals has set oral arguments for Oct. 7 in the challenge of the Federal Trade Commission’s Combating Auto Retail Scams Rule (“CARS Rule”). The petition, filed on January 5, 2024 by the National Automobile Dealers Association and Texas Automobile Dealers Association asks the court to vacate or modify the rule and stay its enforcement pending resolution of the petition.… Continue Reading
Vroom, FTC Agree to $1 Million Settlement over Car Sales Misrepresentation
By Michael R. Guerrero & Brian Turetsky on
Vroom, the former used car sales website which halted vehicle sales in January 2024, has agreed to a proposed settlement with the FTC over allegations the company misrepresented that it had examined all vehicles before listing them for sale, failed to obtain customers’ consent to shipment delays and failed to provide prompt refunds when cars were not delivered on time.… Continue Reading
CFPB issues report on negative equity in auto financing
By Brian Turetsky & John L. Culhane, Jr. on
Posted in Auto Finance, CFPB
A new CFPB report, “Negative Equity in Auto Lending,” contains an analysis of data relating to the financing of negative equity in vehicle trade-ins. The report uses data collected by the CFPB in response to nine market monitoring orders issued by the CFPB in February 2023. The orders were issued to three banks, three finance companies, and three captive lenders requesting information about their auto lending portfolios. … Continue Reading
FTC files opposition to petition challenging CARS Rule in the 5th Circuit
By Brian Turetsky on
On May 14, 2024, the Federal Trade Commission’s (“FTC”) filed its brief in opposition to Petitioners’ Brief in the legal challenge to the Combating Auto Retail Scams Rule (“CARS Rule”). The petitioners are the National Automobile Dealers Association and Texas Automobile Dealers Association (collectively, “NADA”). In its opposition, the FTC addresses NADA’s three main arguments, namely that the FTC: (1) unlawfully issued the CARS Rule without the required advance notice of proposed rulemaking (“ANPR”), (2) failed to articulate a rational connection between its factual findings and its decision to impose a far-reaching, industry-wide rule, and (3) unreasonably and arbitrarily evaluated the benefits and costs of the CARS Rule.… Continue Reading
Update on Petition to Review FTC’s CARS Rule
By Brian Turetsky on
Petitioners in the challenge to the Federal Trade Commission’s (“FTC”) Combating Auto Retail Scams Rule (“CARS Rule”) filed their Petitioners’ Brief on March 15, 2024 in support of their petition for review, and a who’s who of interested auto industry trade associations have filed amicus briefs in support of the petition.… Continue Reading
The CARS Rule: What you need to know about the Federal Trade Commission’s final motor vehicle dealer trade regulation rule, Part II
By Barbara S. Mishkin on
Our special guest is Richard (“Rick”) Hackett, former Assistant CFPB Director responsible for auto finance regulation and presently a member of the Board of F&I Sentinel, which supports lender compliance in the auto finance and insurance industry. In December 2023, the FTC announced its final Combatting Auto Retail Scams Rule, otherwise known as the “CARS Rule,” which sets new requirements on the sale, financing, and leasing of new and used vehicles by motor vehicle dealers. … Continue Reading
CFPB seeks approval for new auto finance data collection
The CFPB recently published a notice in the Federal Register indicating that it is seeking approval from the Office of Management and Budget (OMB) for the collection of additional auto finance data pursuant to its authority under the Dodd-Frank Act .
In February 2023, the CFPB announced that it had issued market monitoring orders to nine large auto lenders requesting information about their auto lending portfolios. … Continue Reading
This week’s podcast episode: The CARS Rule: What you need to know about the Federal Trade Commission’s final motor vehicle dealer trade regulation rule, Part I
By Barbara S. Mishkin on
Our special guest is Richard (“Rick”) Hackett, former Assistant CFPB Director responsible for auto finance regulation and presently a member of the Board of F&I Sentinel, which supports lender compliance in the auto finance and insurance industry. In December 2023, the FTC announced its Combatting Auto Retail Scams Rule, otherwise known as the “CARS Rule,” which sets new requirements on the sale, financing, and leasing of new and used vehicles by motor vehicle dealers. … Continue Reading