On October 30, a bipartisan group of 22 Senators sent a letter to the CFPB raising concerns about CFPB guidance affecting the indirect auto financing market and auto dealers’ ability to negotiate retail margins with consumers. The guidance at issue, contained within CFPB Bulletin 2013-02, advised bank and nonbank indirect auto financial institutions about compliance with federal fair lending requirements in connection with the practice by which auto dealers “mark up” the financial institution’s risk-based buy rate and receive compensation based on the increased interest revenues.
Editor’s Note: There is a question as to whether the CFPB is living up to the transparency requirements of the Obama Administration with respect to disseminating for public comment it underlying methodlogy to use the proxy methods described below.
November 4, 2013 – 6:19 pm ET
WASHINGTON — The Consumer Financial Protection Bureau on Monday gave more clues about the methods underpinning its claims that auto dealers engaged in bias in setting interest rates for car loans. But the National Automobile Dealers Association says the agency didn’t provide the answers that its members were looking for.