Auto Finance

Auto lending is a dynamic market second only to housing in size, with nearly $900 billion in outstanding auto loan balances. Banks hold approximately a third of all auto loan balances, followed closely by captive auto lenders, credit unions and auto finance companies. Under the Dodd-Frank Act, the CFPB has the authority to supervise all depository institutions with more than $10 billion in assets. However, the Bureau has also been granted the authority to supervise “larger participants” in consumer financial markets. The CFPB exercised this authority by issuing a rulemaking proposal to extend its supervisory reach over nonbank auto lenders, such as the captives and auto finance companies. CBA is largely supportive of this effort as consumers should expect to receive the same level of protection no matter where they receive their auto loans.
  • January 21, 2016
    On Thursday, January 21, 2016, the CFPB took action against Herbies Auto Sales, a buy-here pay-here used car dealer, for allegedly using abusive financing schemes, hiding auto finance charges and misleading consumers. Under the consent order, Herbies is required to pay $700,000 in redress to consumers, with a suspended civil penalty of $100,000. The company also must stop deceiving consumers...
  • January 20, 2016
    On Wednesday, January 20, 2016, the House Financial Services Committee (HFSC) released a report entitled: “Unsafe at any Bureaucracy, Part II: How the Bureau of Consumer Financial Protection Removed Anti-Fraud Safeguards to Achieve Political Goals.” The second in a series, the report investigates the CFPB’s actions in the indirect auto market. In conjunction with the release, the HFSC also...
  • December 23, 2015
    Last December, we pointed out five F&I trends to watch in 2015 . Here’s a look at how each fared this year. 1. Political pushback on the Consumer Financial Protection Bureau. Legislators and national dealer and lender trade groups came after the CFPB this year with guns blazing. In April a bipartisan bill was introduced in the U.S. House of Representatives that would significantly limit the...
  • December 18, 2015
    CFPB Takes Action against Auto Dealer On Thursday, December 17, 2016, the CFPB announced action against CarHop, one of the country's biggest "buy-here, pay-here" auto dealers, and its affiliated financing company, Universal Acceptance Corporation, for allegedly providing damaging, inaccurate consumer information to credit reporting companies. The parties also allegedly failed to provide accurate...
  • December 4, 2015
    CARY, N.C. - Two captive finance companies and a commercial bank all made changes to their top executive teams this week. Beginning with Ford Motor Credit, the Blue Oval’s captive named Joy Falotico as chief operating officer. The OEM also elected Falotico as a corporate officer. Currently, Falotico, is executive vice president, Ford Credit Marketing, Sales, Americas and Strategic Planning. She...
  • December 3, 2015
    According to the company’s press release, Wirth, a more than 25-year auto finance veteran, main objective is to strengthen Huntington’s dealer outreach and product and service innovation. “Tom has earned tremendous respect across the industry and dealer community alike,” said Rich Porrello, Huntington auto finance director. “We are thrilled to have him on the team to help drive our continued...
  • November 20, 2015
    CFPB Releases Updates to Rulemaking Agenda On Friday, November 20, 2015, the CFPB released its semiannual rulemaking agenda as part of the federal government's Unified Agenda of Regulatory and Deregulatory Actions. Part of the CFPB's mandate from Congress is to make rules governing consumer finance markets more effective and to create new rules when warranted. The agenda includes rulemaking...
  • October 30, 2015
    CFPB Takes Aim at Employment Background Screening Report Providers On Thursday, October 29, 2015, the CFPB announced an enforcement action against two of the largest employment background screening report providers - General Information Services and its affiliate, e-Background-checks.com, Inc. In the consent order , the Bureau alleged the companies violated the Fair Credit Reporting Act by...
  • October 21, 2015
    WASHINGTON—A top financial regulator warned of risks in the fast-expanding auto-lending sector, raising the prospect of fresh regulatory pressure in an area that has been a bright spot for banks. While policy makers have generally declared the U.S. banking system recovered from the financial crisis, Comptroller of the Currency Thomas Curry raised a rare red flag, saying in a speech that some...
  • October 2, 2015
    Director Cordray Testifies Before House Financial Services Committee On Tuesday, September 29, 2015, CFPB Director Richard Cordray appeared before the House Financial Services Committee to offer the Semi-Annual Report of the Bureau of Consumer Financial Protection. In his testimony , he noted the recent growth in the mortgage market as well as in other consumer credit markets. He also touted the...

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