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I am proud to report that Ballard attorneys Peter N. Cubita and Christopher J. Willis have been selected to receive a 2016 Distinguished Legal Writing Award from The Burton Awards, which recognize outstanding legal writing.  They are being honored for their article entitled “Auto Finance and Disparate Impact: Substantive Lessons Learned from Class Certification Decisions,” which was published in the May 1, 2015, edition of the Consumer Financial Services Law Report. … Continue Reading

The U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness has sent a detailed letter to Director Cordray in which it criticizes the CFPB’s approach of “regulation by enforcement settlement combined with issuance of brief guidance statements” in lieu of engaging in rulemaking or otherwise soliciting public input. 

In the letter, the Chamber expresses its strong belief that “if the Bureau identifies areas in which it wants to fundamentally alter the rules, it should take the time to write new standards rather than rely on one-off enforcement and press release “warnings” to other regulated companies.” … Continue Reading

According to a recent Wall Street Journal article, the National Automobile Dealers Association (NADA) has issued fair credit guidance to assist auto dealers in complying with the CFPB’s March 2013 indirect fair lending bulletin.  The bulletin stopped short of mandating the elimination of dealer finance charge participation.  However, in remarks made since the bulletin’s issuance, Director Cordray and other CFPB officials have expressed a strong distaste for dealer finance charge participation as a method of dealer compensation in the indirect auto finance market. … Continue Reading

The CFPB’s auto fair lending guidance continues to draw criticism from members of Congress, most recently from Congressman Blaine Luetkemeyer, a member of the House Financial Service Committee.  

In a November 15 letter to Director Cordray, Mr. Luetkemeyer challenged the CFPB for not having studied how a shift to flat fee compensation for dealers would affect the cost of credit to borrowers, particularly low-and moderate-income borrowers. … Continue Reading

The CFPB has responded to the October 30 letter it received from a bipartisan group of 22 U.S. Senators raising concerns about the fair lending auto finance bulletin issued by the CFPB this past March.  The Senators’ letter posed a series of questions and we expect many of the Senators will find the answers provided by the CFPB in its five-page letter dated November 4 to be less than satisfactory.  … Continue Reading

Democratic Senator Edward Markey wants the FTC to take a more active role in policing auto dealer sales practices.  Because Dodd-Frank bars the CFPB from directly regulating auto dealers, the CFPB has targeted the fair lending practices of banks and non-banks purchasing auto finance consumer contracts from auto dealers.  In a letter sent to the FTC on October 23, Senator Markey called on the FTC to investigate whether auto dealers are using “potentially unfair or deceptive financing practices to sell cars to consumers and then take all appropriate action to address these practices to protect consumers.” … Continue Reading

Yesterday, the CFPB, jointly with the Federal Reserve Board and the Department of Justice, held a webinar on fair lending considerations related to “indirect auto lending” programs.  The presenters were Patrice Ficklin, CFPB Fair Lending Director, Maureen Yap,
Special Counsel/Manager in the Fed’s Fair Lending Enforcement Section, and Coty Montag, Deputy Chief of the DOJ’s Housing and Civil Enforcement Section of the Civil Rights Division. … Continue Reading

As we reported, on May 28, 2013, Democratic members of the House Committee on Financial Services sent a letter to Director Cordray requesting information about the CFPB’s activities related to auto fair lending, including “the methodology the CFPB has adopted to determine whether fair lending violations exist.”

In his response dated June 20, Director Cordray states that a typical fair lending exam of an “indirect auto lender would include a review of credit denials, interest rates quoted by the lender to the dealer (called ‘buy rates’), and any discretionary mark-up of the buy rate by the dealer (the interest rate quoted by the dealer to the consumer minus the ‘buy rate’).”… Continue Reading