American Financial Services Association (AFSA) Statement
on CFPB Bulletin on Indirect Auto Lending
By Chris Stinebert, AFSA President & CEO
March 21, 2013
“AFSA welcomes the CFPB’s guidance on indirect auto lending and compliance with the Equal Credit Opportunity Act. However, the bulletin raises as many questions as it answers.
AFSA and its members do not tolerate discrimination, which hurts consumers, the community and our industry. In light of the CFPB’s bulletin, AFSA will work with the CFPB for clarification of their remarks about incentives and significant risks posed by dealer participation. Furthermore, AFSA will seek an explanation from the CFPB on what tolerances, if any, are available to lenders under the discretionary dealer participation model. This guidance has offered no alternatives beyond moving to a flat fee, which CFPB has stated publicly has not worked in the past.
The CFPB clearly acknowledges the value that dealers provide consumers through dealer arranged financing and that dealers deserve to be reasonably compensated for their work. The practice of dealer participation is time-tested and has kept the price of vehicle financing affordable for all borrower. The performance of auto loans is high and the default rates are at historic lows.
AFSA intends to work with the CFPB for a solution that fairly treats consumers, protects their access to credit and choice, and reasonably compensates dealers for the value they provide.”
Based in Washington, D.C., AFSA (www.afsaonline.org) is the national trade association for the consumer credit industry, protecting access to credit and consumer choice. Its 350 members include consumer and commercial finance companies, auto finance/leasing companies, mortgage lenders, credit card issuers, industrial banks and industry partners.
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Media Contact: Karen Klugh
AFSA Statement on CFPB Bulletin on Indirect Auto Lending