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
CFPB issues orders requesting information to large auto lenders
On February 23, 2023, the CFPB announced in a blog post that it had issued orders to nine large auto lenders requesting information about their auto lending portfolios. The orders, which the CFPB says were sent to a cross-section of the auto finance market, represent the latest action taken by the Bureau in its effort to build a new data set that gives better insight into market trends. … Continue Reading
DOJ Settles SCRA Interest Rate Action Against Auto Finance Company
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
DOJ and CFPB send notification letter to auto finance companies regarding SCRA protections
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
This week’s podcast: Hot issues in auto finance
We discuss recent developments concerning fair lending and ancillary products, including the potential industry-wide implications of recent New York and Massachusetts consent orders and our expectations for future CFPB scrutiny in these areas. We also discuss the CFPB’s recent report that looks at whether the variation in interest rates among subprime auto loans can be explained by differences in borrower creditworthiness and share our thoughts on how the report’s finding are likely to impact future CFPB activity.… Continue Reading
FTC study examines issues experienced by consumers when buying and financing a vehicle
Last week, the FTC released two new reports about the agency’s findings from an April 2017 study of consumers’ experiences with the car buying process. The FTC’s Bureau of Consumer Protection (BPC) authored a summary report called “Buckle Up: Navigating Auto Sales and Financing.” The BPC, in partnership with the FTC’s Bureau of Economics, also published, “The Auto Buyer Study: Lessons from In-Depth Consumer Interviews and Related Research,” which provides a more detailed discussion of the April 2017 study underlying the FTC’s findings.… Continue Reading
House Financial Services Subcommittee Holds Hearing on Discrimination in Auto Loans and Insurance
This past Wednesday the House Committee on Financial Services’ Subcommittee on Oversight and Investigations held a hearing titled “Examining Discrimination in the Automobile Loan and Insurance Industries.” As the Majority Staff’s Hearing Memo noted, auto loan debt is the third largest category of household debt, after mortgages and student loans, and Americans now owe $1.26 trillion in auto loan debt.… Continue Reading
Upcoming Congressional Hearings on Small-Dollar Lending & Auto Finance
This week, two House Financial Services Subcommittees will hold hearings.
Tomorrow afternoon at 2:00PM ET, the Consumer Protection and Financial Institutions Subcommittee will convene a hearing entitled, “Ending the Debt Traps in the Payday and Small Dollar Credit Industry.”
On Wednesday, May 1 at 10:00AM ET, the Oversight and Investigations subcommittee will convene a hearing entitled, “Examining Discrimination in the Automobile Lending and Insurance Industries.”… Continue Reading
CFPB Supervisory Highlights looks at auto loan ancillary product refunds
Yesterday, the CFPB released the Winter 2019 edition of its Supervisory Highlights. The report discusses the Bureau’s examination findings in the areas of automobile loan servicing, deposits, mortgage loan servicing, and remittances. In this blog post, we focus on the Bureau’s findings relating to auto loan servicing. (We will discuss the Bureau’s other findings in a separate blog post.)… Continue Reading
Will the NYDFS pick up the baton on disparate impact auto dealer pricing?
If you’ve followed the status of the CFPB’s enforcement actions under the Equal Credit Opportunity Act related to auto dealer finance charge participation, you probably would have concluded that those cases are unlikely to resurface. Not only did Congress override the CFPB’s Bulletin describing the underlying legal theory, but then the Bureau’s new leadership made a statement immediately thereafter describing the cases as an “overreach.”… Continue Reading