On September 28, 2022, the Department of Justice (”DOJ”) announced a settlement with Westlake Financial Services (“Westlake”), a Los Angeles-based indirect auto finance company specializing in subprime and near-subprime loans, resolving allegations that Westlake failed to fully provide interest rate benefits to eligible servicemembers as required under the Servicemembers Civil Relief Act (“SCRA”). … Continue Reading
Auto Finance
CFPB expresses concern about the potential credit impact of high vehicle costs for consumers
By Brian Turetsky on
In a blog post on Monday, the CFPB advised that it is concerned about the impact of rising car prices on consumer’s financial health, particularly consumers with sub-prime or near prime credit scores. The most recent Quarterly Report on Household Debt and Credit from the Federal Reserve Bank of New York concluded that the total dollar value of outstanding auto loans rose to $1.5 trillion last quarter, an increase of $33 billion from Q1 to Q2 this year. … Continue Reading
Trade groups react to FTC’s proposed Motor Vehicle Dealers Trade Regulation Rule as public comment period closes
By Brian Turetsky on
Expressing a range of concerns, several key industry groups submitted comments to the Federal Trade Commission (“FTC”) last week regarding its proposed rule that would impose new substantive and disclosure obligations on auto-dealers in the auto finance process. The public comment period for the notice of proposed rulemaking (“NPRM”) regarding the Motor Vehicle Dealers Trade Regulation Rule (the “Rule”) closed on September 15, 2022 after the FTC declined in August to extend it. … Continue Reading
FTC declines to extend comment period for proposed motor vehicle dealer rule
By Joel E. Tasca on
The FTC has declined requests to extend the comment period for its proposed rule that would impose a number of new substantive and disclosure requirements on motor vehicle dealers in connection with the car buying or leasing process.
The FTC’s notice of proposed rulemaking (NPRM) was published in the Federal Register on July 13, 2022 with a 60-day comment period that ends on September 12, 2022. … Continue Reading
This week’s podcast episode: A close look at the Federal Trade Commission’s proposed rule for motor vehicle dealers, with special guests Sanya Shahrasbi and Daniel Dwyer, Staff Attorneys, FTC Bureau of Consumer Protection, Division of Financial Practices
By Barbara S. Mishkin on
The FTC’s proposal would impose a number of new substantive and disclosure requirements on motor vehicle dealers in connection with the car buying or leasing process. The topics we cover include: the FTC’s statutory authority for the proposal and the proposal’s coverage (including buy-here-pay-here dealers); the specific new requirements the proposal would impose; how the proposal interacts with existing federal and state laws; the proposal’s impact on auto finance companies; potential remedies for violations; and timing of next rulemaking steps.… Continue Reading
DOJ and CFPB send notification letter to auto finance companies regarding SCRA protections
By Brian Turetsky on
On July 29, 2022, the Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) issued a notification letter (the “joint letter”) to “remind” auto lenders and leasing companies of the protections provided to servicemembers and their dependents under the Servicemembers Civil Relief Act (SCRA). The joint letter provides a very basic overview and reminder of the vehicle repossession protections, early vehicle lease termination rights, and interest rate cap available to eligible servicemembers under the SCRA.… Continue Reading
CFPB announces settlement with Hyundai to resolve alleged FCRA violations
By John L. Culhane, Jr. & Michael Gordon on
The CFPB announced last week that it has entered into a settlement with Hyundai Capital America (Hyundai) to resolve alleged violations of the Fair Credit Reporting Act and Regulation V arising from Hyundai’s reporting of information on vehicle retail installment contracts and leases to consumer reporting agencies (CRAs) from 2016 to 2020. … Continue Reading
FTC proposes new rule imposing prohibitions and disclosure requirements on auto-dealers in car-buying process
By Joel E. Tasca on
The Federal Trade Commission (FTC) recently proposed a rule that would impose a number of new substantive and disclosure requirements on auto-dealers in the car-buying process. The FTC described the proposed Rule as one designed “to ban junk fees and bait-and-switch advertising tactics that can plague consumers throughout the car-buying experience.” … Continue Reading
CFPB Spring 2022 Supervisory Highlights looks at auto servicing, credit reporting, credit card account management, debt collection, deposits, mortgage origination, prepaid accounts, remittance transfers, and student loan servicing
The CFPB has released the Spring 2022 edition of its Supervisory Highlights. The report discusses the Bureau’s examinations in the areas of auto servicing, consumer reporting, credit card account management, debt collection, deposits, mortgage origination, prepaid accounts, remittance transfers, and student loan servicing that were completed between July 2021 and December 2021. … Continue Reading
FTC announces $10 million settlement with auto dealerships for alleged unlawful add-on charges and discriminatory conduct
By John L. Culhane, Jr. on
The FTC has announced the settlement of a lawsuit filed jointly with the Illinois Attorney General against a group of auto dealerships that alleged the dealerships violated federal and state law by engaging in deceptive practices in connection with add-on charges and by discriminating against Black consumers in connection with the financing of vehicle purchases. … Continue Reading