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The FTC’s proposal would impose a number of new substantive and disclosure requirements on auto dealers in connection with the car buying or leasing process.  We first discuss NADA’s comment letter to the FTC on the proposal, including NADA’s concerns with the process used by the FTC to issue the proposal and with the proposal’s disclosure, recordkeeping, website posting, and other requirements. … Continue Reading

On October 18, 2022, the Federal Trade Commission (“FTC”) announced a settlement with a Washington, D.C.-area auto dealer, Passport Automotive Group (“Passport”), resolving allegations that it had deceived consumers by adding illegal “junk” fees onto car prices and charging Black and Latino consumers higher financing costs and fees.  Under the terms of the settlement, Passport will pay more than $3.3 million in consumer redress.… Continue Reading

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

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

After announcing several years ago that it intended to pick up with fair lending enforcement in the indirect auto finance market where the CFPB left off, the New York Department of Financial Services has announced two consent orders with smaller, New York-chartered banks based on the allegation that allowing auto dealers to negotiate the retail prices of retail installment contracts resulted in a disparate impact on the basis of race and national origin.… Continue Reading

The FTC recently announced a settlement of its lawsuit filed in a New York federal district court against a New York City car dealership and its individual general manager in which the FTC alleged that the defendants discriminated against African-American and Hispanic car buyers and engaged in other illegal business practices. … Continue Reading

The CFPB and Department of Justice (the “Agencies”) announced recently that they have entered into a settlement with Toyota Motor Credit Corporation (TMCC) to resolve charges that TMCC engaged in unlawful discrimination in violation of the Equal Credit Opportunity Act (ECOA).  The settlement includes TMCC’s agreement to change its so-called “dealer compensation policy” and pay up to $21.9 million in remediation to affected consumers. … Continue Reading

Republican members of the House Financial Services Committee recently released a report, prepared by the Republican Staff of the Committee, which chronicles in detail the controversial automotive ECOA enforcement initiative of the CFPB with respect to what it characterizes as “dealer markup.”  The highly critical nature of the report is encapsulated by its title, which is “Unsafe at Any Bureaucracy:  CFPB Junk Science and Indirect Auto Lending.” … Continue Reading

Earlier this month, American Honda Finance Corporation (AHFC) entered into a settlement with the CFPB and the Department of Justice to resolve charges that it engaged in unlawful discrimination in violation of the Equal Credit Opportunity Act (ECOA).  The settlement includes AHFC’s agreement to change its auto dealer compensation policy, pay $24 million in restitution, and distribute $1 million towards the administration and operation of a consumer financial education program. … Continue Reading

It seems two major auto dealer trade groups share my doubts about whether the CFPB’s position on dealer rate participation will really help car buyers.  In a statement responding to CFPB Bulletin 2013-02,  the National Automobile Dealers Association and the National Association of Minority Automobile Dealers assert that the CFPB guidance “attempts to force auto finance sources into changing the way they compensate dealers without any indication that the Bureau has examined the effect this change could have on the cost of credit for consumers.” … Continue Reading