Auto Finance

CFPB Focusing on Risks in Car Loans

The Consumer Financial Protection Bureau (CFPB) released its quarterly report on credit trends for the third quarter of 2017 last week, focusing on trends in the auto lending industry.  Auto loans are a key sector in the lending market—approximately100 million auto loans are outstanding, valued at more than $1 trillion….

Read More

Massachusetts Attorney General Has Now Recovered More Than $12 Million In Connection With Its Subprime Auto Lending Investigation

This time last year, LLW reported on the Department of Justice going after subprime auto lenders, and more recently we have reported on the CFPB’s targeting of subprime auto lenders.  But Massachusetts has also gotten in on the regulatory action.  On March 16, 2016, the Massachusetts Attorney General’s Office (MAG) announced that American Credit…

Read More

House Republicans Level Another Blow at CFPB’s Auto-Lending Policies

Scrutiny of the CFPB’s auto-lending supervision and enforcement practices was renewed last week when Republicans on the U.S. House of Representatives Committee on Financial Services issued another scathing report criticizing the agency, this time focusing on its handling of the distribution of the Ally Financial auto-lending settlement funds.  Concurrently with…

Read More

Add-On Products Continue To Present Litigation Risks For Lenders

The Consumer Financial Protection Bureau’s recent action against two credit card vendors regarding credit monitoring and identity theft protection services is a reminder of the legal risks associated with certain add-on products. The July 1 settlement, in which the CFPB found that the vendors misled customers about the benefits of…

Read More

CFPB Director Proposes to Supervise "Captive" Auto Finance Companies

On September 18, CFPB Director Richard Cordray delivered remarks at a Field Hearing about CFPB’s latest proposed rule, which would allow it to begin regulating “captive” finance companies – those entities owned by automotive manufacturers “for the primary purpose of facilitating sales for their parent companies and associated dealers.” In his…

Read More

FTC Settles with Auto Lender over Improper Servicing, Collection, and Quality Control Practices

The Federal Trade Commission (FTC) recently announced a $5.5 million monetary and injunctive settlement with auto lender Consumer Portfolio Services, Inc. (CPS) concerning allegations that the company used illegal tactics in servicing and collecting consumers’ auto loans, and failed to adopt proper quality controls, in violation of Section 5 of…

Read More