AFSA, Trades Comment on Bureau Auto Lending Announcement
Last week, AFSA, along with many other trade associations, submitted a comment letter to the Consumer Financial Protection Bureau (CFPB) in response to its announcement seeking additional information on auto lending. The letter laid out several issues with the Bureau’s request.
First, the Bureau’s press release and documentation “lack meaningful context, transparency, and direction.” Additionally, instead of using the Request for Information (RFI) process, the Bureau chose to seek information via press release which lacks the robust framework that allows stakeholders and agencies to have clear, targeted conversations regarding the topic.
Second, the CFPB has initiated discussions with some stakeholders but has failed to include all. The comment letter asks the Bureau to ensure that all relevant stakeholders are invited into future discussions.
Next, the Bureau’s announcement makes another incorrect assumptions, including that:
- Car prices have risen, leading to larger loan amounts but has not cited any information to back up the statement.
- There has been an increase in delinquencies but fails to explain that this is a correction from historically low delinquencies caused by the pandemic, and;
- Expresses concerns over the industry’s ability to conduct independent analyses, an observation that is not factual.
Finally, the letter asks the Bureau to update existing databases, namely it’s Auto Loan Dashboard, which contains much of the information the Bureau seeks. Moreover, there are numerous sources for auto loan data, including documents from the federal reserve, reports and analyses from private companies and reports from media outlets, that the Bureau can look to before initiating a likely duplicative process with industry players.
December 28th, 2022
