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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

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

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

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

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

The CFPB has filed a lawsuit in a Georgia federal district court against USASF Servicing (USASF) in which the CFPB alleges that USASF engaged in various unfair acts or practices in violation of the Consumer Financial Protection Act.  USASF services retail installment sales contracts (RICs) originated by its affiliate, U.S. Auto Sales, Inc.,… Continue Reading

On January 31, 2023, the Massachusetts Attorney General’s Office (“Mass AG”) announced a settlement with Hometown Auto Framingham, Inc. (“Hometown Auto”), resolving allegations that the auto dealership had engaged in unfair, deceptive, and discriminatory pricing of add-on products sold to Black and Hispanic consumers.  Under the terms of the settlement, Hometown Auto will pay $350,000, which includes $200,000 in restitution and a $150,000 civil penalty.… Continue Reading

On December 1, 2022, nationwide used car dealer CarMax Auto Superstores, Inc. (“CarMax”) and 36 state attorneys general announced a $1 million multistate settlement that will require CarMax to disclose open recalls related to the safety of its used vehicles before consumers purchase them.  The settlement resolves an investigation into CarMax’s advertising and sales practices related to vehicle recalls since 2014. … Continue Reading

According to a Politico report, CFPB Acting Director Mick Mulvaney, speaking at a Washington, D.C. event, commented on changes to the Bureau’s approach to bringing enforcement actions and the Bureau’s plans to review the use of the disparate impact theory of ECOA liability.

With regard to enforcement actions, Mr. Mulvaney is reported to have indicated that the Bureau plans to consider the scale and frequency of violations when deciding whether to bring an enforcement action against a company. … Continue Reading

The CFPB has unveiled its latest “Know Before You Owe” initiative aimed at consumers shopping for an auto loan.  The new initiative was accompanied by the CFPB’s release of a report entitled “Consumer Voices on Automobile Financing” that is intended to share the CFPB’s research about how consumers approach decisions about auto financing.… Continue Reading