In a memo issued to the CFPB this week, the AFSA listed seven recommendations regarding the bureau’s proposed rule that would give it regulatory and supervisory authority over 30 nonbank auto finance companies.
Honda revealed in a regulatory filing this week that its captive finance company is facing discrimination charges by the CFPB and DOJ. The revelation comes a week after Toyota’s captive said it is facing similar allegations.
Toyota Motor Credit Corporation issued a statement to F&I and Showroom regarding last week’s regulatory filing. It revealed that the CFPB and the DOJ are alleging that the captive’s practices in the auto finance sector have resulted in the discriminatory pricing of auto loans.
Following an announcement that it would seek supervisory authority over 38 nonbank auto finance companies, the CFPB held a field hearing on the topic in Indiana this morning.
The CFPB announced this week a proposed rule that would allow it to oversee about 38 nonbank auto finance companies. The bureau also plans to release a new whitepaper which details the methodology it uses to determine the presence of discrimination in auto lending.
Industry associations responded this week to a New York Times opinion piece claiming that subprime auto lending is a predatory practice that stands to go the way of subprime mortgages.
In a Securities and Exchange Commission filing this week, GM Financial revealed that it was served with a subpoena by the U.S. Department of Justice. It is requesting documents related to the origination and securitization of subprime auto loan contracts dating back to 2007.
The House Financial Services Committee passed a bill this week that would bring more transparency to the CFPB’s guidance-making process. If approved by Congress, it would effectively repeal the bulletin the bureau issued last year on indirect auto lending.
Equifax reported today that auto finance’s total outstanding balance reached a record high in the opening quarter. New credit reached an eight-year high, while serious delinquencies fell to their lowest level in more than five years.
A memo released by the NADA this week states that the CFPB’s proposed method for eliminating fair lending risk in the auto lending arena would do no such thing. Instead, dealers would still have discretion when it comes to selecting a finance source for their customers.
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