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.
Jeffrey Langer will be stepping into Richard Hackett’s former role as assistant director of installment and liquidity lending markets for the bureau.
The Center for Responsible Lending released findings last week that show negotiation does not help African American and Latino car buyers secure better interest rates on auto loans. Auto trade groups, however, were critical of the study’s findings, claiming it lacks data to support its claims.
Thirteen Democrats in Congress sent a letter to the CFPB's Richard Cordray, asking for “any and all background information” on the bureau's investigations of auto finance.
In a bulletin issued today, the CFPB warned banking institutions that they could be on the hook for discriminatory markups imposed by dealers. The bureau’s notice also contains guidance on how finance sources should address fair lending risk.
At least four banks have 15 days to provide an explanation of their auto lending practices to the Consumer Financial Protection Bureau, or they could face lawsuits.
Chase, Wells Fargo and Huntington Bank report expanded auto lending in the fourth quarter 2012 vs. the same quarter in 2011.
Subprime borrowers now make up more than 46 percent of the auto finance segment, Equifax noted in a new report that showed subprime origination growth across all lending sectors.
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