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Auto Finance News; CFPB and The Dealers

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For the past couple years, dealers have been standing on the sidelines watching lenders and regulators go to head to head on fair lending issues. Since late last year, though, dealers ― who are officially exempt fromConsumer Financial Protection Bureau oversight ― have slowly been drawn into the match, and now they’re now gearing up for the latest bout.

At the recent National Automobile Dealers Association convention in New Orleans, conversations about compliance overheard in elevators, along sidewalks, and even at a French Quarter oyster bar overshadowed stories of vibrant dealer performance, as players in the market discussed how to be best prepared when the CFPB (www.consumerfinance.gov) comes knocking. In a lively speech, NADA’s incoming Chairman Forest McConnell III told members that the Washington, D.C.-based organization is working through the tough regulatory and legislative changes. In an effort to appease government concerns, NADA (www.nada.org) unveiled details of its new Fair Credit Compliance Policy and Program.

The move comes on the heels of a Fitch Ratings (www.fitchratings.com) report last month that says compliance requirements will likely raise regulatory costs for lenders in 2014 and could lead to the elimination of dealer markups altogether. NADA’s new compliance program template seeks to avoid such a move.

“As CFPB has stated, there are many ways to solve this problem, and we’ve found one,” NADA Senior Director of Legislative Affairs Bailey Wood told Auto Finance News.” We have found a way to take care of any disparate impact discrimination by having an explained reason other than race as to why an auto loan was discounted.”

LINK TO FULL STORY

AFN Blog-The Subprime- Seesaw

Increasingly relaxed credit underwriting standards in the subprime auto world are helping lift auto sales across the country, according to a report today from Bloomberg News.

Bloomberg checks in on Houston auto dealer Alan Helfman, who tells the story of a customer who drove away with a new Dodge Dart-despite a credit score south of 500.

Link to full blog post at AFN

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Written by codylyonreporter

November 19, 2013 at 1:53 am

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