Comments on the Consumer Financial Protection Bureau’s (CFPB or Bureau) proposal to collect data from auto finance businesses that acquire or originate as few as 500 financing transactions a year are due by March 25, 2024.

The CFPB recently published a Notice and Request for Comment in the Federal Register requesting approval from the Office of Management and Budget of its proposed Auto Finance Data Project. Specifically, the CFPB is proposing to collect a set of data annually from lenders that originate or acquire more than 20,000 auto loans in the previous calendar year. This data collection would mirror that collected in last year’s Auto Finance Data Pilot aimed at nine of the largest auto lenders, requesting information about their lending portfolios, discussed here.

In the pilot, the CFPB focused its data requests on the following:

  • Lending channels — the data requests required lenders to identify whether each loan was direct or indirect and specific terms of each loan.
  • Repossessions — the CFPB requested information on the circumstances leading up to a repossession, the impact of a repossession on the borrower and lender, and information about the kinds of technology used during repossession, such as GPS tracking and starter-interrupt devices.

The CFPB also proposes to collect a set of data annually from lenders that originate between 500 and 20,000 loans in the previous calendar year. According to the CFPB, this data collection would request information on the number of vehicles repossessed and the number of loan modifications.

The CFPB requests comments by March 25, 2024 on the following:

  • Whether the collection of information is necessary for the proper performance of the functions of the CFPB, including whether the information will have practical utility;
  • The accuracy of the CFPB’s estimate of the burden of the collection of information, including the validity of the methods and the assumptions used;
  • Ways to enhance the quality, utility, and clarity of the information to be collected; and
  • Ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.

Our Take:

This endeavor appears to be an effort by the Bureau to engage in supervision over auto finance businesses that don’t meet the size requirement to be larger participants for purposes of the CFPB’s supervisory authority (that authority currently covers participants with at least 10,000 “aggregate annual originations). It is also worth noting that recent data requests by the Bureau under § 1022 of the Dodd-Frank Act, including those requests sent as part of last year’s pilot, indicate that the information collected may be used for any purpose, including enforcement. The CFPB appears to be gearing up for some action in the auto finance market, and Troutman Pepper will be monitoring the CFPB’s movements in this space.