Don’t Discriminate

We looked at each other with astonishment. Patrice Ficklin, assistant director for the Consumer Financial Protection Bureau (CFPB)’s Office of Fair Lending and Equal Opportunity, had just concluded her 40-minute “fireside chat” at the American Financial Services Association (AFSA)’s 2014 Vehicle Finance Conference. She had told the audience she’d stick around to answer any questions.

We media guys and gals in the room weren’t sure if the offer extended to us. As I’ve written before, the CFPB isn’t speaking to the media. I glanced over at WardsAuto’s Steve Finlay, who looked back and shrugged. Meanwhile, Automotive News’ Jim Henry was already circling the spot where Ficklin was holding court.

My buddy Ted Craig with Used Car News was sure she wasn’t referring to us, but followed me anyway as I made my way to the dais. Already there with his pen and notepad at the ready was Auto Remarketing’s Nick Zulovich, who was only two people away from getting in front of Ficklin. I took my place next to Nick, who turned to me and asked if I thought she’d take our questions. I responded by suggesting that we not be so quick to identify ourselves, which is a no-no in our business.

“Hey, it says ‘media’ on our badge,” I told him.

Ficklin finally finished up with the guy standing between us. She smiled and waited to hear what we had to say. Nick, to my disappointment, introduced himself as an editor with Auto Remarketing, and Ficklin immediately retreated.

“I can’t talk to you,” she said.

Finlay, grizzled veteran that he is, followed up with a question. He asked her if she replaced Rick Hackett, who left the CFPB last August after serving two years as assistant director for the bureau’s Office of Installment and Liquidity Lending Markets. He was considered a valuable conduit between the CFPB and the industry, and many on our side of the aisle considered his departure a great loss. Hackett, by the way, is set to join Hudson Cook LLP as a partner this March, an unbelievable pickup for the law firm.

Ficklin did respond to Finlay’s question, but she said she didn’t want to be quoted. That’s when she noticed I was jotting down everything she was saying. “I see you writing, Gregory Arroyo” — only she rolled the “R”s like my grandmother does. “I know where to find you.”

Shocked and even a little embarrassed, I shot back: “I’m feeling a little discriminated against right now.” The small group that remained in the room laughed.

I guess I’m not sure why the bureau won’t talk to us media people. Having worked in newspapers, I’m used to the standard “We can neither confirm nor deny” response I get from regulators, but this is different. I’m not asking about an investigation; I just want to know how my readers can meet the bureau’s expectations.

So what did I want to ask Ficklin? Well, it had to do with her message to the audience. See, Ficklin spent the first 20 minutes of her address recapping the guidance the bureau issued last March regarding rate participation, telling audience members that the bureau is not asking finance sources to move to flat fees. She also defended the bureau’s method for identifying discriminatory markups in finance portfolios. But what got me was when she encouraged finance sources to communicate with the bureau to help it perfect its formula.

My question was: How can the bureau and the Department of Justice (DOJ) issue an enforcement action that resulted in Ally agreeing to a $98 million settlement when the formula isn’t yet perfected? Everyone in that room figured that Ally didn’t fight the bureau’s allegations because the enforcement action was issued in December, the same month the finance company was seeking to become a financial holding company — a presumption Jim Henry had already confirmed in his interview with Ally CEO Michael Carpenter.

What Ficklin didn’t realize is I had an ace up my sleeve. Standing beside me was Tony Dupaquier, F&I and Showroom contributor and director of F&I training for American Financial and Automotive Services’ Automotive Training Academy. His badge didn’t say “media” and Ficklin took his question.

Tony asked her how the bureau accounted for customers who know their credit standing and are prepared to negotiate vs. customers who come in blind and take whatever rate is presented because they’re just happy to be able to buy a car. Instead of an answer, Tony received an invitation to Washington, D.C. Apparently, Ficklin thought he could bring some industry insight to the bureau. Boy, this is going to be interesting.