On March 3, 2022, the Consumer Financial Protection Bureau issued Bulletin 2022-04: Mitigating Harm From Repossession of Automobiles (the Bulletin). In this Bulletin, the Bureau warns vehicle finance companies about harms to consumers from repossession, and the Bureau’s plans to punish finance companies for causing these harms by invoking the Bureau’s authority to police unfair, deceptive, and abusive acts and practices.
The Bureau has a legitimate role to play in enforcing the federal consumer protection laws and policing the consumer finance markets from bad actors. But if the Bureau sincerely wants to help consumers, education would be more beneficial than perpetuating the false and unproductive narrative of finance companies abusing customers.
Here’s what the Bureau can do to empower customers:
- Educate consumers about how vehicle finance contracts work;
- Explain that consumers who are delinquent on their vehicle finance contracts have options other than repossession, like modification, reinstatement, and voluntary surrender;
- Give consumers information about the financial effects of repossession, including the obligation to pay repossession-related fees; and
- Urge consumers to stay in close contact with creditors when problems arise, because there are more options to resolve issues earlier in a default than later.
Over the past two years, hundreds of thousands of consumers have experienced financial hardships, and it is always a sensitive situation when a consumer lacks the resources to make timely payments. That is why finance companies worked to ensure that the brunt of many of those hardships were mitigated. Consumers do have options, and the Bureau can be a constructive player by sharing tools and techniques to resolve a default in an efficient and mutually respectful manner. AFSA and the AFSA Education Foundation are eager to help.
More education, less castigation
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