On February 24, the Consumer Financial Protection Bureau (CFPB or Bureau) released a blog post, outlining multiple auto lending topics in the wake of rising vehicle prices. According to Bureau of Labor Statistics data, the consumer price index has risen 40% for used cars and trucks and 12% for new cars since January 2021. As a result of these increases, the CFPB expects the total amount of debt and average loan size to continue to rise.

The blog post outlines three primary ways the CFPB seeks to ensure a fair, transparent, and competitive auto lending market in the wake of the significant price changes:

  • Ensuring affordable credit for auto loans;
  • Monitoring practices in auto loan servicing and collections; and
  • Fostering competition among subprime lenders.

Specifically, the CFPB:

  • Plans to monitor lending structures and consumers outcomes, particularly those where lenders rely on high interest rates and fees — even in the event of consumer failure;
  • Is concerned that loan-to-value ratios will begin to rise as they did prior to the global vehicle shortage;
  • Wants servicers to make accommodations available to all consumers;
  • Intends to work with other federal agencies to ensure proper treatment of servicemembers;
  • Is concerned that the use of technologies, such as GPS location devices and license plate recognition technology, may disproportionately impact certain communities and also cause privacy issues; and
  • Wishes to understand potential barriers to entry in the subprime market and seeks to work with the Federal Trade Commission and the Federal Reserve Bank Board of Governors to address issues in the market.

The CFPB’s blog post serves as a reminder that auto finance is still very much on the Bureau’s radar. It also provides a glimpse into the types of items the CFPB will be looking at in auto finance under Director Rohit Chopra.

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Photo of Alan D. Wingfield Alan D. Wingfield

Alan Wingfield is a partner in the firm’s Consumer Financial Services practice, with a focus on Financial Services Litigation and consumer law compliance counseling. Alan has represented businesses in many venues nationally in class action and individual consumer litigation. Alan’s practice includes compliance…

Alan Wingfield is a partner in the firm’s Consumer Financial Services practice, with a focus on Financial Services Litigation and consumer law compliance counseling. Alan has represented businesses in many venues nationally in class action and individual consumer litigation. Alan’s practice includes compliance counseling to help businesses with the myriad federal and state consumer protection laws and laws regulating financial services companies.

Photo of Stefanie Jackman Stefanie Jackman

Stefanie devotes her practice to assisting financial services institutions facing state and federal government investigations and examinations, counseling them on complex compliance issues, as well as defending them in individual and class action lawsuits. Stefanie represents clients across the financial services industry, including…

Stefanie devotes her practice to assisting financial services institutions facing state and federal government investigations and examinations, counseling them on complex compliance issues, as well as defending them in individual and class action lawsuits. Stefanie represents clients across the financial services industry, including banks and nonbanks, mortgage banking lenders and servicers, debt collectors and buyers, third-party service providers, health care and medical revenue cycle service providers, credit and prepaid card companies, auto lenders, and fintechs. She regularly advises her clients on issues arising under an array of federal and state consumer financial laws, including UDAP/UDAAP statutes, the FDCPA, FCRA, TCPA, EFTA, SCRA, and TILA.

In addition to her litigation and government investigations work, Stefanie focuses a significant portion of her practice on providing compliance-related advice to her clients. She regularly counsels clients on conducting compliance assessments relating to their debt collection, credit reporting and dispute resolution processes, fair lending and underwriting, and vendor oversight, as well as the functionality of their overall compliance management system. Stefanie also brings her litigation and enforcement experience to bear in assisting clients in designing new products and processes, including product structuring, advertising, online application flows, underwriting, and servicing-related strategies.

Photo of Chris Capurso Chris Capurso

Chris’ practice focuses on consumer financial services law, primarily on federal and state law compliance matters. Chris regularly advises financial institutions, lenders, and sales finance companies in the development and maintenance of closed-end and open-end lending, automobile finance, fintech, point-of-sale, small dollar, and…

Chris’ practice focuses on consumer financial services law, primarily on federal and state law compliance matters. Chris regularly advises financial institutions, lenders, and sales finance companies in the development and maintenance of closed-end and open-end lending, automobile finance, fintech, point-of-sale, small dollar, and other credit programs. He provides guidance on federal consumer protection laws and regulations, including TILA, ECOA, ESIGN, and GLBA.