On March 26, the CFPB held a public hearing on payday and auto title lending, the same day that it released proposed regulations for short-term small-dollar loans. Virginia Attorney General, Mark Herring gave opening remarks, during which he asserted that Virginia is perceived as the “predatory lending capital of the East Coast,” suggesting that payday and auto title lenders were a large part of the problem.… Continue Reading
Vehicle Loans
CFPB shows its hand on payday (and title and longer-term high-rate) lending
The CFPB has moved a step closer to issuing payday loan rules by releasing a press release, factsheet and outline of the proposals it is considering in preparation for convening a small business review panel required by the Small Business Regulatory Enforcement Fairness Act and Dodd-Frank. The CFPB’s proposals are sweeping in terms of the products they cover and the limitations they impose. … Continue Reading
Furnishers Beware – CFPB Signals That Civil Penalties May Be Appropriate Even Without Any Actual Consumer Injury
Yesterday, the CFPB announced a consent order with First Investors Financial Services Group, Inc., an auto finance company that both makes loans to consumers and purchases retail installment sale contracts from auto dealers. Under the terms of the consent order, First Investors agreed to pay a $2.75 million civil penalty relating to allegations that it knowingly failed to fix flaws in a computerized credit reporting system it had purchased from a third-party vendor.… Continue Reading
CFPB General Counsel Meredith Fuchs in the “Disparate Impact” Hot Seat
As we previously reported, the House Financial Services Committee has been interested in the specific methodology and metrics used by the CFPB in its disparate impact analysis under the Equal Credit Opportunity Act and Regulation B. On March 7, Chairman Hensarling sent a letter to Director Cordray seeking a response to the Committee’s questions, and it appears the CFPB has yet to respond to the letter.… Continue Reading
Did the CFPB Run a Stop Sign?
As we previously reported, last Friday House Financial Services Committee Chairman Jeb Hensarling (R-TX) sent a letter to CFPB Director Richard Cordray asking for a response by March 13 to specific questions about the methodology and analyses employed by the CFPB in determining whether dealer finance charge participations violate the Equal Credit Opportunity Act and Regulation B.… Continue Reading
House Financial Services Committee Chairman to CFPB on Indirect Auto Investigations: Slow Down. Pull Over. And Show Us Some ID.
Since last March, when the CFPB issued Bulletin No. 2013-02, its highly controversial release warning banks and finance companies that purchase motor vehicle installment sales contracts that, under existing law, any dealer finance charge participation may violate the Equal Credit Opportunity Act and Regulation B, numerous members of Congress have been unsuccessful in seeking clear and precise information from the CFPB as to how it determines that practices that are neutral on their face are nonetheless discriminatory. … Continue Reading
Auto dealer trade group issues fair credit guidance
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
Jeff Langer to join CFPB
We have learned that Jeff Langer, an experienced attorney with a strong industry background, will be joining the CFPB to serve as Assistant Director, Installment and Liquidity Lending Markets. In that position, Jeff will oversee auto and student lending. (Corey Stone, CFPB Assistant Director, Deposits, Cash, Collections and Reporting Markets, will continue to oversee smaller dollar loan markets, including payday and auto title loans.) … Continue Reading
House member questions CFPB auto fair lending guidance cost impact
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
A future without dealer participation and what it should look like, according to the CFPB
At the CFPB’s auto finance forum on November 14, Director Cordray and other CFPB officials reiterated their distaste for dealer finance charge participation as a method of dealer compensation in the indirect auto finance market. (As readers know, dealer participation involves dealers setting the finance charge above the rate at which a bank or finance company has indicated it might be willing to buy a contract; the dealer keeps a portion or all of the difference.) … Continue Reading