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Category Archives: Vehicle Loans

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Furnishers Beware – CFPB Signals That Civil Penalties May Be Appropriate Even Without Any Actual Consumer Injury

Posted in Auto Finance, CFPB Enforcement, CFPB General, Vehicle Loans

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… More >

CFPB General Counsel Meredith Fuchs in the “Disparate Impact” Hot Seat

Posted in Auto Finance, CFPB Enforcement, Vehicle Loans

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… More >

Did the CFPB Run a Stop Sign?

Posted in CFPB Enforcement, Fair Lending, Vehicle Loans

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… More >

House Financial Services Committee Chairman to CFPB on Indirect Auto Investigations: Slow Down. Pull Over. And Show Us Some ID.

Posted in CFPB Enforcement, Fair Lending, Vehicle Loans

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… More >

Auto dealer trade group issues fair credit guidance

Posted in Fair Lending, Vehicle Loans

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,… More >

Jeff Langer to join CFPB

Posted in CFPB People, Student Loans, Vehicle Loans

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… More >

House member questions CFPB auto fair lending guidance cost impact

Posted in Fair Lending, Vehicle Loans

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… More >

A future without dealer participation and what it should look like, according to the CFPB

Posted in Fair Lending, Vehicle Loans

 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… More >

CFPB responds to letter from Senators raising concerns about auto fair lending guidance

Posted in Fair Lending, Vehicle Loans

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… More >

CFPB announces November 14 auto finance forum

Posted in Vehicle Loans

The CFPB has announced that it will hold an auto finance forum at its Washington, D.C. headquarters on November 14.  The event, which will  be streamed live on the CFPB’s blog, will feature remarks from CFPB Director Richard Cordray and a discussion with consumer groups, industry representatives, and members of the public.  The CFPB typically… More >

Senators raise concerns about CFPB auto fair lending guidance

Posted in Fair Lending, Vehicle Loans

A  bipartisan group of 22 U.S. Senators –11 Republicans and 11 Democrats–sent a letter to the CFPB yesterday raising concerns about the fair lending auto finance bulletin issued by the CFPB this past March.  In particular, the Senators question the CFPB’s efforts to “eliminate or severely limit” dealer finance charge participation “through a ‘disparate impact’… More >

Democratic Senator wants more regulation of auto dealers

Posted in Vehicle Loans

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… More >

House Democrats request auto fair lending information from the CFPB

Posted in Fair Lending, Vehicle Loans

We have previously blogged about the CFPB’s laser-like focus on the fair lending practices of banks and non-banks purchasing auto finance consumer contracts from auto dealers. See here, here, here, here, and here. In many of our posts, we have been very critical of the Bureau’s deployment of the disparate impact theory for identifying violations… More >

Auto finance: can we really call disparate impact “discrimination”?

Posted in CFPB Enforcement, Fair Lending, Vehicle Loans

I want to thank Jeff Sovern over at the Public Citizen Consumer Law & Policy Blog for having an interesting back-and-forth with me over the last week about the application of the disparate impact theory of liability to dealer finance charge participation in the auto sales finance context.  We’ve been debating whether the CFPB’s announced… More >

How the CFPB’s stance on ECOA in auto finance will raise consumer prices

Posted in CFPB Enforcement, Fair Lending, Hot Issues, Vehicle Loans

Ever since the CFPB’s release of its bulletin relating to disparate impact analysis of dealer rate participation last week, the press and consumer advocacy groups have been buzzing about the Bureau’s stance and its potential impact on the industry and consumers.  Alan Kaplinsky and I previously blogged about the bulletin and its associated issues here, here… More >

Auto dealer trade groups question CFPB guidance

Posted in CFPB Enforcement, Fair Lending, Vehicle Loans

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… More >

The CFPB previews its coming auto finance fair lending enforcement actions

Posted in CFPB Enforcement, Fair Lending, Hot Issues, Vehicle Loans

Earlier today, the CFPB released its guidance bulletin with respect to automobile indirect finance fair lending issues.  The bulletin’s intent is unmistakably clear from the accompanying press release’s tag line: “CONSUMER FINANCIAL PROTECTION BUREAU TO HOLD AUTO LENDERS ACCOUNTABLE FOR ILLEGAL DISCRIMINATORY MARKUP.”  The bulletin is, in my view, a prelude to the fair lending… More >

The CFPB Stretches ECOA Past the Breaking Point with Auto Finance

Posted in CFPB Enforcement, Fair Lending, Vehicle Loans

 In a story released last night, Carter Dougherty at Bloomberg reports that the CFPB has warned “at least four banks” that it may take enforcement action against them under ECOA, alleging that a “policy” of “allowing” dealers to negotiate contract APRs with retail buyers had a disparate impact in the pricing of retail installment sale… More >

CFPB lawyer discusses disparate impact in auto financing and says important development to happen soon

Posted in Fair Lending, Vehicle Loans

At the ABA Consumer Financial Services Committee meeting earlier this week, Rick Hackett, Assistant Director of the Research, Markets and Regulations Division of the CFPB, spoke about “Discretionary Pricing in Indirect Auto Finance.” Rick made it very clear that the CFPB is sticking to its position that the disparate impact theory applies under the Equal… More >

CFPB describes plans for its auto loan complaint system

Posted in Vehicle Loans

As we reported, apparently unbeknownst to Director Cordray, the CFPB began taking complaints about student loans and vehicle and other consumer loans on March 1. While announcing the opening of its student loan system on the home page of its website, the CFPB’s first mention of the launch of its complaint system for vehicle and… More >

CFPB expands complaint system: who forgot to tell Director Cordray?

Posted in Deposit Accounts, Student Loans, Vehicle Loans

In a blog post appearing today on the CFPB’s newly redesigned website, Director Cordray announced that the CFPB is now taking on-line complaints about deposit accounts. According to Director Cordray’s blog post (and the CFPB’s press release about the expansion), the only other complaints currently being taken by the CFPB are credit card and mortgage loan… More >