Earlier this summer, the Consumer Financial Protection Bureau (CFPB) shared its initial findings from the Auto Finance Data Pilot, an initiative designed to monitor the auto loan market for consumer risks. The pilot involves collecting data from nine large auto lenders, representing a cross-section of the market. The CFPB found that consumers who financed negative equity from a prior vehicle into a new auto loan were more likely to have their account assigned to repossession, larger auto loans, lower credit scores, lower income, and longer loan terms.
Some consumer advocate groups have urged the bureau to go farther, capturing auto lending data on buy-here/pay-here dealerships and predatory lending targeting military servicemembers. According to a letter sent to the bureau, the Consumer Federation of America, the National Consumer Law Center and Americans for Financial Reform Education Fund urged the bureau to do the following:
- collect data on auto financing from credit unions, so that the Bureau can compare outcomes of consumers who financed directly with a credit union with similarly situated consumers who obtained an “indirect loan” from a credit union through a dealership
- expand the data collection requirements to apply to “Buy Here Pay Here” dealerships, and to evaluate their use of pre-dispute arbitration agreements, as the Consumer Groups believe that these dealerships may cause consumer harm that goes unchecked
- collect data concerning auto leases to ensure that dealers pass tax credits on to consumers who lease clean vehicles
- collect data related to “language access, including language preferences, ease of accessibility, translation efforts, and other customer service practices.”
