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
Auto Finance
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
FTC postpones effective date for CARS Rule in response to legal challenge
By Brian Turetsky on
On January 18, 2024, the Federal Trade Commission’s (“FTC”) announced that it is postponing the effective date of the Combating Auto Retail Scams Rule (“CARS Rule”) in light of the legal challenge from industry trade associations seeking judicial review of the new rule. In a 3-0 vote, the FTC’s commissioners approved an order that, while taking issue with the trade associations’ arguments in the petition for review that the FTC maintains are “mischaracterizations,” stays the effective date pending the completion of that review “in the interests of justice.” … Continue Reading
Auto dealer trade groups challenge FTC CARS Rule in Fifth Circuit
By Brian Turetsky & John L. Culhane, Jr. on
On January 5, 2024, two trade groups representing auto dealers filed a petition for review challenging the Federal Trade Commission’s (“FTC”) new Combating Auto Retail Scams Rule (“CARS Rule”). In the petition, the National Automobile Dealers Association (“NADA”) and Texas Automobile Dealers Association (“TADA”) ask the United States Court of Appeals for the Fifth Circuit to vacate or modify the rule and stay its enforcement pending resolution of the petition.… Continue Reading
Ballard Spahr to hold January 23 webinar on FTC Cars Rule
By Barbara S. Mishkin on
In December 2023, the Federal Trade Commission 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. The final rule prohibits certain misrepresentations in the financing process, sets disclosure requirements on dealers’ advertising and sales communications, mandates that dealers obtain consumers’ express, informed consent for charges, and prohibits the sale of add-on products or services if there is no benefit to the consumer.… Continue Reading
FTC issues final CARS Rule setting new requirements on vehicle sales
By Brian Turetsky & John L. Culhane, Jr. on
On December 12, 2023, the Federal Trade Commission (“FTC”) announced its Combating Auto Retail Scams Rule, otherwise known as the “CARS Rule,” setting new requirements on the sale, financing, and leasing of vehicles by motor vehicle dealers. The final rule, which is effective on July 30, 2024, prohibits certain misrepresentations in the financing process, sets disclosure requirements on dealers’ advertising and sales communications, mandates that dealers obtain consumers’ express, informed consent for charges, and prohibits the sale of add-on products or services if there is no benefit to the consumer.… Continue Reading
FTC and Wisconsin AG enter into settlements with auto dealerships for alleged discriminatory financing practices and deceptive add-on product practices
By John L. Culhane, Jr. & Brian Turetsky on
The Federal Trade Commission and Wisconsin Attorney General have entered into settlements with a group of auto dealerships, their current and former corporate owners, and their general manager for allegedly engaging in unlawful discrimination in connection with financing offered to customers and for allegedly engaging in deceptive practices in connection with the sale of add-on products. … Continue Reading