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CFPB yesterday announced it is proposing to oversee larger nonbank auto finance companies and released a "supervisory highlights" report offered as further guidance to indirect auto lenders, including credit unions, about the potential for fair lending violations.

The proposal affecting nonbank auto lenders is out for a 60-day comment period. It would allow the bureau to supervise compliance with federal consumer protections by nonbank auto finance companies that make, acquire or refinance 10,000 or more loans or leases in a year.

CFPB estimates about 38 auto finance companies would be subject to oversight; these originate about 90 percent of nonbank auto loans and leases, it said. Last year, they provided financing to about 6.8 million consumers.

This proposal only applies to nondepository institution lenders. CFPB directly supervises only credit unions and banks with $10 billion or more in assets, but it is not limited by institution asset size in going after fair-lending violators in concert with the Justice Department.

CFPB's supervisory highlights report follows up on the bureau's 2013 bulletin to indirect auto lenders; it focuses on past cases of auto-lending discrimination. There is no change in the bureau's policy stance here: A credit union or bank could potentially be held liable for fair lending violations by third parties they engage with for indirect auto lending.

NAFCU strongly supports fair-lending practices but objects to credit unions being put between auto dealers and CFPB, which has no general statutory authority over the dealers.

In other news, NCUA reminds credit unions of the agency's own guidance on indirect lending in the September edition of The NCUA Report. The guidance, a 2010 letter to credit unions, highlights the warning signs examiners should look for in their reviews of indirect lending activities.