On January 29, the Consumer Financial Protection Bureau (CFPB or Bureau) released a report analyzing the auto lending market’s impact on servicemembers. This report indicates that servicemembers face heightened financial challenges in the auto lending market, including higher loan amounts, interest rates, and monthly payments. Despite these challenges, servicemembers were less likely to experience vehicle repossessions.
Last week, the U.S. Court of Appeals for the Third Circuit issued an opinion denying class certification in a case under the Telephone Consumer Protection Act (TCPA) finding common issues did not predominate the individual inquires. The decision further clarified the application and constitutionality of the statute to unsolicited fax advertisements.
Yesterday, the U.S. Court of Appeals for the Fifth Circuit issued a significant opinion vacating the Federal Trade Commission’s (FTC) Combating Auto Retail Scams Trade Regulation Rule (CARS Rule). The decision came in response to a petition filed by the National Automobile Dealers Association (NADA) and the Texas Automobile Dealers Association (TADA), challenging the procedural validity of the rule. The petitioners argued that the FTC violated its own regulations by failing to issue an advance notice of proposed rulemaking (ANPRM) before promulgating the CARS Rule. They also contended that the FTC’s cost-benefit analysis was arbitrary and capricious.
In this special year-in-review episode of Moving the Metal: The Auto Finance Podcast, hosts Brooke Conkle and Chris Capurso from Troutman Pepper Locke’s Consumer Financial Services Practice Group delve into the significant events and regulatory changes that shaped the auto finance industry in 2024. From the Federal Trade Commission’s CARS Rule and its legal challenges to the Consumer Financial Protection Bureau’s data collection initiatives and supervisory highlights, this episode provides a comprehensive overview of the past year. Tune in to gain insights into the trends and regulatory shifts that will influence the auto finance landscape in 2025.
In a previous post, we discussed the oral arguments held on December 18, 2024, by the U.S. Court of Appeals for the Eleventh Circuit in the case of Insurance Marketing Coalition Limited (IMC) v. Federal Communications Commission (FCC). The case challenged the FCC’s December 2023 order under the Telephone Consumer Protection Act (TCPA), which aimed to reduce unwanted robocalls and texts by closing the “lead generator loophole” and requiring “one-to-one consent” for telemarketing communications. The new rule was set to take effect on January 27, 2025. However, during oral arguments, the Eleventh Circuit judges expressed skepticism about the FCC’s justification for its new rule.
As discussed here, in February 2023, the Consumer Financial Protection Bureau (CFPB or Bureau) launched the auto finance data pilot and issued nine market monitoring orders to three banks, three finance companies, and three captive lenders. This initiative aimed to gather comprehensive data on auto lending portfolios. Yesterday, the CFPB issued a Repossession in Auto Finance report using the dataset to show that repossession assignments increased for certain consumers post-2020, but many consumers avoided repossession in parts of 2021 and 2022. The data also indicates that repossession forwarders were increasingly involved in repossession activity, potentially resulting in increased repossession costs passed on to consumers.
On January 21, the Supreme Court heard oral arguments in the case of McLaughlin Chiropractic Associates, Inc. v. McKesson Corporation. As discussed here, the primary issue is whether the Hobbs Act, which limits judicial review of Federal Communications Commission (FCC) “final orders” to appellate courts, requires district courts to accept the FCC legal interpretation of the Telephone Consumer Protection Act (TCPA). While the Supreme Court previously addressed whether the Hobbs Act applied in private litigation, it ultimately did not resolve whether a district court is required to follow a particular FCC order interpreting the TCPA.
In this episode, Brooke Conkle and Chris Capurso from Troutman Pepper Locke’s Consumer Financial Services Practice Group are joined by Chris Carlson, a partner in the Regulatory Investigations Strategy and Enforcement Practice Group. They delve into recent enforcement actions impacting the auto finance sector, including a landmark $20 million settlement involving the Federal Trade Commission and the Illinois attorney general against Leader Automotive Group. The discussion covers deceptive advertising, unauthorized add-on charges, fake online reviews, and the sale of gray market vehicles. Additionally, they explore a stipulated judgment the Connecticut attorney general reached with a national auto retailer. Tune in to understand the implications of these actions and what auto finance companies should take away from these regulatory developments.
In a significant enforcement action, the Federal Trade Commission (FTC) and the Illinois Attorney General have reached a $20 million settlement with Leader Automotive Group and its Canadian parent company, AutoCanada, over allegations of widespread consumer fraud. If entered, this settlement will be the largest monetary judgment the FTC has secured against an auto dealer.
On December 18, the U.S. Court of Appeals for the Eleventh Circuit held oral arguments in Insurance Marketing Coalition Limited (IMC) v. Federal Communication Commission (FCC), which challenges the FCC’s December 2023 order under the Telephone Consumer Protection Act (TCPA). The stated aim of the order is to reduce unwanted robocalls and texts by closing the “lead generator loophole,” and require “one-to-one consent” for telemarketing communications. The new rule is set to take effect next month. However, during oral arguments, the Eleventh Circuit judges expressed skepticism about the FCC’s justification for its new rule.