Equal Credit Opportunity Act Automotive Industry

News & Analysis as of

CFPB and DOJ Take Action Against Fifth Third Bank

On September 28, 2015, the Consumer Financial Protection Bureau (CFPB) announced two separate actions against Fifth Third Bank. The first action—brought only by the CFPB—relates to Fifth Third Bank’s marketing of credit card...more

Why Does the CFPB Want to Curb Auto Lenders’ Discretion to Charge Higher or Lower Interest Rates?

On July 14, 2015, the Consumer Financial Protection Bureau (“CFPB”) and Department of Justice (“DOJ”) announced they had reached a “groundbreaking settlement” with American Honda Finance Corporation (“Honda”).(1) The...more

Adjusting to CFPB's Auto Finance Examination Authority

On Aug. 9, the Consumer Financial Protection Bureau rule that enables the CFPB to supervise the biggest nonbank automobile finance companies took effect, subjecting the auto finance industry to new and unprecedented...more

Auto finance company agrees to change dealer compensation policy to settle CFPB and DOJ fair lending claims

Earlier this month, American Honda Finance Corporation (AHFC) entered into a settlement with the CFPB and the Department of Justice to resolve charges that it engaged in unlawful discrimination in violation of the Equal...more

Supreme Court Slams The Brakes On Challenge To Disparate Act

As of now, the Equal Credit Opportunity Act (ECOA) prohibits dealers from unintentional, or “disparate impact,” discrimination in setting dealer reserves in auto financing. This disparate impact can result from policies or...more

Auto Finance Company Agrees to Change Dealer Compensation Policy to Settle CFPB and DOJ Fair Lending Claims

To resolve charges by the Consumer Federal Protection Bureau (CFPB) and the Department of Justice (DOJ) that it engaged in unlawful discrimination in violation of the Equal Credit Opportunity Act (ECOA), American Honda...more

CFPB Brings First ECOA Disparate Impact Action Post-Inclusive Communities

Just over 18 months after bringing a disparate impact-based ECOA case against Ally Financial (“Ally”) for discriminatory auto loan pricing, the CFPB has struck again—this time taking action against American Honda Finance...more

CFPB Continues Crackdown on Fair Lending: Marketing Materials Targeted

In a recent guidance bulletin, the Consumer Financial Protection Bureau reminded mortgage lenders to heed their Equal Credit Opportunity Act (ECOA) obligations when considering applicants receiving public assistance income....more

CFPB Finalizes Rules to Regulate Nonbank Auto Lenders

The CFPB adopted a final that allows the agency to supervise larger nonbank auto finance companies for the first time. The CFPB also released the examination procedures that its examiners will use. Currently, the Bureau...more

DOJ and North Carolina AG Settle First-Ever Federal Discrimination Suit Involving Auto Lending

On February 10, the DOJ, along with the U.S. Attorney’s Office for the Western District of North Carolina and the North Carolina AG, announced the settlement of the federal government’s discrimination suit involving two “buy...more

CFPB Offers More Details On Plans To Supervise Auto Finance Market

On September 17, the CFPB released new information about its plans to supervise and enforce auto finance companies’ compliance with consumer financial laws, including fair lending laws. As it indicated it would earlier this...more

The CFPB Eyes Supervisory Regulation Over Large Auto-Lenders

Large auto-lenders may soon have to contend with a new regulator. In its most recent semi-annual report, the Consumer Financial Protection Bureau (“CFPB”) highlighted its intent to promulgate a new rule which would subject...more

CFPB to issue whitepaper on methodology for identifying auto finance discrimination and consider use of advisory opinions

While Director Cordray’s appearance at the House Financial Services Committee’s hearing on the CFPB’s fifth Semi-Annual Report yesterday was accompanied by the usual dose of political theater, his testimony did yield the...more

CFPB General Counsel Meredith Fuchs in the “Disparate Impact” Hot Seat

As we previously reported, the House Financial Services Committee has been interested in the specific methodology and metrics used by the CFPB in its disparate impact analysis under the Equal Credit Opportunity Act and...more

House Financial Services Committee Chairman to CFPB on Indirect Auto Investigations: Slow Down. Pull Over. And Show Us Some ID.

Since last March, when the CFPB issued Bulletin No. 2013-02, its highly controversial release warning banks and finance companies that purchase motor vehicle installment sales contracts that, under existing law, any dealer...more

Report On CFPB’s Auto Finance Forum

This morning, the CFPB hosted an auto finance forum, which featured remarks from CFPB staff and other federal regulators, consumer advocates, and industry representatives. Some of the highlights include...more

Auto Notes, Fall 2013: Dealer Markup Practices - In a New Era of Federal Enforcement

In March 2013, the U.S. Consumer Finance Protection Bureau (“CFPB”) announced that it would closely scrutinize dealer reserve (“markup”) practices. The federal concern is that dealer markups may result in an illegal disparate...more

The CFPB’s response to June 20, 2013 Congressional letter regarding the indirect auto lending bulletin: raises more questions than...

On August 2, 2013, the CFPB responded to the June 20, 2013 letter from 35 Republican members of the U.S. House of Representatives, questioning the manner in which the CFPB developed recent guidance regarding indirect auto...more

Congress, CFPB Trade Letters On Fair Auto Lending Guidance

On June 20, 35 Republican Members of the U.S. House of Representatives sent a letter to CFPB Assistant Director of the Office of Fair Lending and Equal Opportunity, Patrice Ficklin, questioning the manner in which recent CFPB...more

CFPB Fair Lending Guidance for Indirect Auto Lenders—It’s Not Just About Cars

Several weeks ago, the Consumer Financial Protection Bureau (“CFPB”) issued a fair lending guidance bulletin (“Bulletin”) directed at financial institutions that make indirect automobile loans. While the Bulletin thus far has...more

House Democrats request auto fair lending information from the CFPB

We have previously blogged about the CFPB’s laser-like focus on the fair lending practices of banks and non-banks purchasing auto finance consumer contracts from auto dealers....more

CFPB Targets Auto Financing For Enforcement

The Consumer Finance Protection Bureau continues to spread its wings in the enforcement arena. It is an agency born and confined in political controversy. ...more

Auto finance: can we really call disparate impact “discrimination”?

I want to thank Jeff Sovern over at the Public Citizen Consumer Law & Policy Blog for having an interesting back-and-forth with me over the last week about the application of the disparate impact theory of liability to dealer...more

CFPB Issues Guidance On Indirect Auto Lending

On March 21, the CFPB issued Bulletin 2013-02, which provides guidance to bank and nonbank indirect auto lenders about compliance with federal fair lending requirements, and specifically addresses the practice by which auto...more

How the CFPB’s stance on ECOA in auto finance will raise consumer prices

Ever since the CFPB’s release of its bulletin relating to disparate impact analysis of dealer rate participation last week, the press and consumer advocacy groups have been buzzing about the Bureau’s stance and its potential...more

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