Newsroom

November 05, 2013

CFPB to host auto finance forum in D.C.

Nov. 6, 2013 – The CFPB will host a forum on auto finance Nov. 14 at its headquarters in Washington, D.C., where discussion could touch on the bureau's guidance regarding indirect lending arrangements and disparate impact.

Last week, 22 senators from both sides of the aisle wrote the CFPB with concerns similar to those aired by NAFCU previously about the bureau's guidance for indirect auto lenders and its repercussions. The guidance, which focuses on the fair lending provisions of the Equal Credit Opportunity Act, says lenders may be liable under the doctrines of disparate treatment and impact for disparities in the indirect lender's portfolio.

NAFCU in March also aired concerns about the CFPB's approach with respect to indirect lending arrangements, noting the bureau's guidance appears to put credit unions between auto dealers and the CFPB, which has no direct supervisory authority over auto dealers under the Dodd-Frank Act.

The 22 senators requested documentation on the statistical methodology for determining disparate impact. They also sought information on the bureau's coordination with the Federal Reserve Board and Federal Trade Commission, and why the bureau issued a bulletin instead of a notice of proposed rulemaking, which would be subject to public comment.

The CFPB responded to the letter yesterday, explaining that because non-mortgage lenders do not collect demographic information, the bureau uses proxy methodologies such as the Social Security database and others. The bureau also said the bulletin was a reminder about ECOO-mandated responsibilities, and that it was not mandated to request comments for such an announcement. For similar reasons, the bureau said a formal cost-benefit analysis of the guidance was not required.

CFPB's Nov. 14 forum will include remarks from CFPB Director Richard Cordray and a discussion with consumer groups, industry representatives, and members of the public. It will be streamed live on the agency's blog, starting at 8:45 a.m. Eastern.