Auto Finance

Subscribe to Auto Finance via RSS

As discussed here, on January 4, the Consumer Financial Protection Bureau (CFPB) and the New York Attorney General (NY AG) filed a joint complaint in the U.S. District Court for the Southern District of New York against Credit Acceptance Corporation (Credit Acceptance), a major subprime indirect auto finance company. The joint complaint alleges that Credit Acceptance pushed dealers to sell cars with hidden interest costs, include add-on products, and inflate prices. On March 14, Credit Acceptance filed a motion to dismiss the complaint. On March 21, Troutman Pepper filed an amicus brief in support of Credit Acceptance on behalf of the American Financial Services Association, the Consumer Bankers Association, and the Chamber of Commerce of the United States. Credit Acceptance’s motion to dismiss and Troutman’s amicus brief pointed out the deficiencies in the complaint and fatal flaws in the plaintiffs’ legal theories, as well as challenging, under the appropriations clause of the U.S. Constitution, the CFPB’s right to use unappropriated funds to bring a lawsuit against Credit Acceptance. This issue is currently pending before the Supreme Court in Community Financial Services Association of America Ltd. (CFSA) v. CFPB (discussed here).

On August 1, the U.S. Court of Appeals for the Tenth Circuit upheld a trial court’s order granting summary judgment in favor of a debt buyer holding that claim preclusion barred the plaintiff’s claims brought under the Fair Debt Collections Practices Act (FDCPA) and Utah’s Unfair Claims Settlement Practices Act (UCSPA).

On July 31, the Board of Governors of the Federal Reserve System (Federal Reserve) issued its July Senior Loan Officer Opinion Survey on Bank Lending Practices, which addressed changes in the standards and terms on, and demand for, bank loans to businesses and households in the second quarter of 2023. Banks reported that lending standards are currently on the tighter end of the range for all loan categories. Specifically, standards tightened for all consumer loan categories and demand weakened for auto and other consumer loans, while it remained basically unchanged for credit card loans. Looking forward, banks reported expecting to tighten standards further on all loan categories citing an uncertain economic outlook and expected deterioration in collateral values and the credit quality of loans.

On July 26, the Consumer Financial Protection Bureau (CFPB or Bureau) released the summer edition of its Supervisory Highlights report, providing a high-level overview of alleged unfair, deceptive, or abusive acts or practices (UDAAP) identified by the agency during examinations from July 1, 2022 to March 31, 2023. The findings included in the report cover examinations in the areas of auto origination, auto servicing, consumer reporting, debt collection, deposits, fair lending, information technology, mortgage origination, mortgage servicing, payday and small dollar lending, and remittances.

As recently discussed on our podcast here, section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) amended the Equal Credit Opportunity Act (ECOA) to require lenders to collect information about small business credit applications they receive, including geographic and demographic data concerning the principal owners, lending decisions, and the price of credit. The Consumer Financial Protection Bureau (CFPB or Bureau) issued its proposed rule in 2021, and after considering the over 2,500 comments it received, on March 30, 2023, the CFPB issued the massive, highly technical, and complicated Final Rule. The Final Rule and its accompanying discussion and analysis, as well as the Official Commentary totals 888 pages exclusive of the 123-page Filing Instruction Guide and numerous other documents released by the Bureau. In this first in a multi-post blog series, we will provide a high-level overview of the Final Rule.

As discussed here and here, in October 2022, the Federal Trade Commission (FTC) reached a $3.38 million settlement with Passport Automotive Group (Passport) and two of its officers over allegations that the automotive group violated the Equal Credit Opportunity Act (ECOA) and the FTC Act by adding “junk fees” onto the cost of its…

Today, the Fourth Circuit Court of Appeals issued a much-awaited opinion affirming the dismissal of a servicemember’s class-action suit brought under the Military Lending Act (MLA or Act) because, even though the secured automobile loan at issue financed guaranteed asset protection (GAP) coverage and other fees, the loan was still given for the “express purpose”…

On January 4, the Consumer Financial Protection Bureau (CFPB) and New York Attorney General (NY AG) filed a joint complaint in the U.S. District Court for the Southern District of New York against Credit Acceptance Corporation (Credit Acceptance), a major subprime indirect auto finance company. On March 14, Credit Acceptance filed a motion to dismiss…

On March 23, SB 1033, An Act Concerning Various Revisions to the Banking Statutes, was given a favorable report by the Legislative Commissioners’ Office and sent to the Connecticut Senate. With this bill, Connecticut hopes to join several other states that have set strict rate caps on consumer loans, including Illinois, New Mexico, Colorado…

The Federal Trade Commission (FTC) has reached a settlement with three companies over an alleged telemarketing scam involving extended automobile warranties. In addition to imposing a penalty of $6.6 million, which is largely suspended based on the companies’ inability to pay, the stipulated order includes a lifetime ban from the extended automobile warranty industry and…