The auto finance industry has been recently enjoying some very profitable
and productive years. After emerging from the latest recession, the industry
has seen growth rates slowly return to pre-recession levels with record
low delinquency and losses. While many other businesses including mortgage
and credit card lending have been under intense focus by the regulators,
the nonbank auto finance lenders have largely been off the federal regulators’
radar screen and left to work on improving their regulatory compliance
and control programs in relative anonymity.
That changed in a profound way when the CFPB announced their proposal to
supervise nonbank auto finance companies that make, acquire, or refinance
10,000 or more loans or leases in a year (~38 lenders) to ensure compliance
with the federal consumer financial law. In their release, the CFPB specifically
mentioned they want to make sure that auto lenders, including auto finance
companies, are treating consumers properly throughout the life of loan.
While the focus on discriminatory pricing and lending practices comes
as no surprise and follows previous releases on the topic, the overall
focus on the compliance structure and systems within the industry certainly
has raised the question for auto executives: What do we need to do to
demonstrate regulatory compliance and control?
Download the special report Non-Bank Auto Finance Coming into Focus with the CFPB to learn about the expectations of the CFPB, what makes up a formal compliance
management program, and the Bridgeforce Five-Step Plan to address and
implement a robust and sustainable compliance management system.