Freed From CFPB Order, Toyota Financial to Raise Markup Caps
Toyota’s captive finance company announced it will raise its dealer markup caps following the early termination of consent orders issued by the Consumer Financial Protection Bureau and the Department of Justice.
Toyota Financial Services plans to raise dealer reserve caps as high as 2.5% following the early termination of federal consent orders that called for a flat rate of 1.25%. Photo courtesy Toyota USA
PLANO, Texas — Toyota Motor Credit Corp. announced it will raise dealer markup caps after earning early termination of three-year consent orders the captive finance company entered into with the federal Consumer Financial Protection Bureau and the U.S. Department of Justice in February 2016.
The finance source — better known to auto dealers and car buyers as Toyota Financial Services or “TFS” — made the announcement in a May 1 filing with the U.S. Securities and Exchange Commission. Directors stated, in part, that the captive “has satisfied the requirements for early termination of the consent orders … conditioned upon [TFS’s] completion of the distribution of the consumer restitution funds required by the consent orders.”
The termination will be made official upon court approval of a joint stipulation filed by TFS, the CFPB, and the DOJ. This step is expected to be completed “in the next few weeks,” according to the filing.
Officially filed in February 2016, the consent orders followed a three-year CFPB/DOJ investigation and forced Toyota Financial to become the third major auto finance source — along with Fifth Third Bank and American Honda Finance Corp. — to cap dealer markup at 1.25%. TFS plans to raise that limit to 2% for finance terms of up to 72 months and 1.5% for terms up to 84 months, according to Auto Finance News.
Join F&I and Showroom's Gregory Arroyo and Hudson Cook LLP's Eric Johnson on Wednesday, June 6 (11 a.m. PT/2 p.m. ET), for Part One of the magazine's compliance webinar series, "Who Will Take Up the CFPB's Torch." To register, click here.
More F&I
Why Your F&I PVR Is Misleading You
Here’s a handy checklist of the numbers to track in 2026 instead.
Read More →
Auto Consumer Anxiety Presents Opportunity
A survey of U.S. drivers found the majority are concerned about finances and the economy, but those fears make many ready to buy vehicle-protection products.
Read More →
Humble and Hungry: 12 Rules for an F&I Life
Dustin Gingerich, with a decade in the F&I business under his belt, shares his thoughts on leadership, building trust with customers, and the importance of learning and innovation.
Read More →
Focus on the Opening
F&I managers must learn as much as possible about their customers, starting before they walk into their offices. The bulk of today’s consumers expect that, and good results will follow.
Read More →
F&I Reaches for the Sky
The increasingly important profit center continued making gains in the first quarter, according to StoneEagle data, ancillary products proving more popular as consumers hold onto their buys longer.
Read More →
Timing the Market Can Hurt Long-Term Program Performance
For dealer-owned reinsurance entities, avoiding volatility entirely can mean falling behind inflation and missing market rebounds that drive long term surplus growth. Missing just a handful of strong market days can materially impact cumulative returns—an important reminder for long horizon trust and investment strategies.
Read More →
The 90/10 Rule
In this video, Ryan Ruff explains the rule that elite sales professionals use to turn ordinary conversations into unforgettable customer experiences.
Read More →
Your Office Is Talking
What’s the atmosphere saying about you to your customers? You can make minor adjustments and additions that transform your space into one that creates trust with the people on the other side of the desk.
Read More →
F&I Training Fundamentals
How can auto dealerships help F&I managers fulfill their vital role in the most effective ways? Industry expert Rick McCormick shares his insights on the best ways to train these professionals and help them maintain good habits.
Read More →
Not Just Any Tire Will Do
More consumers and businesses are opting for all-season options for various reasons as safety, sustainability and convenience push practical change.
Read More →