The New York Times reached out recently for AFSA’s perspective regarding the recent Consumer Financial Protection Bureau supervisory review of auto financing practices. We were happy to share some thoughts for the Times’ story (subscription required).
As we noted, the CFPB is quick to categorize errors as though they are malicious, intentional … or profitable. This mischaracterization is not helpful to consumers, lenders, or regulatory bodies and is not accurate.
The CFPB not only mischaracterizes the errors, it also perpetuates an image of the vehicle industry as a whole that the Bureau seems more than happy to keep alive: that lenders are incentivized financially to repossess a vehicle. This is simply not true. Repossession is the last resort after protracted non-payment and efforts by the lender to work with the borrower on other repayment options.
We also pointed out to the Times one of our larger concerns: that if regulators come down too heavily in instances of genuine error or unfortunate timing, it actually creates a disincentive for a lender to be as consumer friendly as it works to be. For example, say a borrower fails to make payments for months, declines to respond to mailed, emailed, and phone notices of nonpayment and a lender’s offers to assist with a payment plan. After all this, the borrower is notified of a repossession, and perhaps finally contacts the lender or makes a last-minute partial payment but not in time for the lender to cancel the repossession. We believe that scenario may be called an “illegal” repossession by the CFPB.
But here is the rub. By essentially playing gotcha with industry practices that are legal but which the Bureau believes should be handled differently, the agency is creating solutions that may put the borrowers in worse situations by inadvertently creating an incentive for creditors to repossess more quickly. This does not benefit the lender, and it certainly doesn’t benefit the borrower, which are the two parties the CFPB has a responsibility to ensure are treated fairly and responsibly.
The CFPB’s Perpetuation Problem
Oct 11, 2024
The New York Times reached out recently for AFSA’s perspective regarding the recent Consumer Financial Protection Bureau supervisory review of auto financing practices. We were happy to share some thoughts for the Times’ story (subscription… Read the rest
AFSA’S HURRICANE RELIEF
Oct 08, 2024
AFSA has launched a fundraising effort to support short- and long-term recovery efforts in communities across the southeast U.S. affected by Hurricanes Helene and Milton, virtually raffling off one fully paid registration for the 2025… Read the rest
October White Paper | Buy Now, Pay Later
Oct 02, 2024
AFSA’s State Government Affairs team has released its October white paper, which is focused on “buy now, pay later” (BNPL) services.
The rise of online shopping has fueled the popularity of BNPL services, which allow consumers… Read the rest
News From Our Members | PayNearMe Expands Presence in Personal Lending With GOLDPoint Systems Partnership
Oct 02, 2024
“News From Our Members” is sponsored content produced by AFSA’s Business Partners’ to provide thought leadership and best practices for AFSA member companies. For more information about this sponsored content opportunity, contact Dan… Read the rest
Featured Business Partner | ACI Worldwide
Oct 01, 2024
The featured Business Partner for the month of October is ACI Worldwide
As an unrivaled leader in billing and payments, ACI Worldwide offers ACI Speedpay, proven to drive efficiency and increase collections. Through our comprehensive suite
News From Our Members | PayNearMe Expands Cutting-Edge Payment Features and Partner Integrations to Empower Auto and Personal Lenders
Sep 30, 2024
“News From Our Members” is sponsored content produced by AFSA’s Business Partners’ to provide thought leadership and best practices for AFSA member companies. For more information about this sponsored content opportunity, contact Dan… Read the rest
Help After Helene
Sep 29, 2024
While the remnants of Hurricane Helene continue up the inland southeast, the devastation to our fellow citizens’ lives is only beginning to be understood, particularly in eastern Tennessee and western North Carolina. AFSA, its member… Read the rest
Unhelpful “Repeat Offender” Registry
Sep 26, 2024
AFSA, along with several other trade associations, wrote to extend support for Rep. Andy Ogles’ (R-TN) Congressional Review Act to nullify the CFPB’s rule to create a “repeat offender” registry. As AFSA has noted, the registry will not… Read the rest
No to Unlocked Handsets
Sep 26, 2024
This week, AFSA wrote to the FCC on a proposed rule that would require handsets to be unlocked even if the installment contract has not been paid off. There are three major concerns with the proposal:
- There are substantial questions as to
So Goes Pennsylvania…
Sep 25, 2024
Pollsters are closely watching the East Coast trio of Pennsylvania, North Carolina, and Georgia as we are now fewer than 50 days away from Election Day. A recent Washington Post poll out of Pennsylvania shows just how tight the race for the … Read the rest