Today's Headlines

    Stinebert Appears on PBS' Autoline This Week

    Last month, AFSA CEO Chris Stinebert taped a segment on Autoline This Week, a PBS show, which airs in 20 markets. Host John McElroy and guests Joe White (Reuters) and Steve Finlay (Ward’s) discussed a variety of topics including CFPB deregulation, the auto lending bubble, and the length of term of vehicle loans.

    The show is available to view online via the Autoline website. It will air in Detroit and 20 other markets starting this Sunday, April 9.

    AFSA’s Himpler Testifies Before Congressional Committee

    AFSA Staff

    Today, AFSA EVP Bill Himpler testified before the House Financial Services subcommittee on Financial Institutions and Consumer Credit in a session entitled Examination of the Federal Financial Regulatory System and Opportunities for Reform. Himpler addressed the Consumer Financial Protection Bureau’s (CFPB) regulatory overreach of the state-regulated consumer credit industry and the need for Congress to reform the bureau’s practices, approve its budget, and amend its structure.

    Himpler’s testimony and responses filled in critical context about the difficulty financial services providers are facing complying with the unbalanced regulations and enforcement actions put forth by the CFPB.

    Himpler noted that while many are focused on financial institutions being too big to fail, AFSA is concerned about those that are “too small to succeed” under the weight of CFPB overregulation.

    “AFSA strongly believes that credit should be available to everyone who can manage it, not just to the wealthy or those with perfect credit scores,” said Himpler in written testimony. “It is not apparent that the CFPB shares this philosophy. The CFPB seems to believe that credit should only be extended to those borrowers who do not present any risk...”

    The committee addressed a variety of issues with regard to the CFPB, including the bureau’s faulty use of disparate impact theory in vehicle finance, issues with the construction and use of the consumer complaint database and a general lack of balance between consumer protection and credit availability.

    “We believe in the CFPB’s mission to protect consumers, but that has to be balanced with ensuring the availably of credit and all too often…it seems that the bureau does not have that balance in mind,” said Himpler in response to questions from the committee.

    On Wednesday, CFPB Director Richard Cordray appeared before the full House Financial Services Committee to deliver his semi-annual report of the bureau. Himpler’s testimony and responses filled in critical context about the difficulty financial services providers are facing complying with the unbalanced regulations and enforcement actions put forth by the CFPB.

    Cordray faced stiff criticism of the bureau from a variety of members, including Chairman Jeb Hensarling (R-Texas) describing Cordray as a “rogue director.”

    “Under Mr. Cordray's leadership, the CFPB has acted unlawfully, routinely denied market participants, due process, and abused its powers,” Hensarling said. “For all the harm inflicted upon consumers, Richard Cordray should be dismissed by the president.”

    The hearing covered a wide breadth of issues, including recent actions by the CFPB against Wells Fargo and alleged insider trading activity at student loan company Navient.

    Rep. Bill Huizenga (R-Mich.) addressed the issue of inaccurate press releases announcing enforcement actions, noting that often, the company in question does not admit guilt, but the CFPB press release announcing the agreement contains accusations that the firm violated the law. AFSA has been asking the CFPB for many years to alter its communications structure to ensure the language used in releases accurately reflects the consent order.

    Bank of America CEO says regulatory relief must be “real and fast”

    AFSA Staff

    AFSA this week attended an invitation-only event hosted by The Washington Post featuring a question & answer session with Brian Moynihan, Chief Executive Officer of Bank of America. He was interviewed by Damian Paletta, Senior Economics Correspondent at the Post.

    In speaking about the effects of Dodd-Frank, Moynihan talked about what his company has had to do to be in compliance with Dodd-Frank after the country’s financial meltdown, but said that the cost of over-regulation is hurting smaller finance companies

    “The problem with Dodd-Frank is how much work it takes for compliance,” he said. “We just filed 500 pages on the Volcker attestation and that’s for a portion of a portion of a portion of our business. Is that (regulation) really needed?

    Moynihan said as a result of Dodd-Frank, the bank has staffed significantly in its Compliance and Risk departments.

    He said smaller financial institutions have to staff up accordingly but without the resources of a major bank.

    “Small businesses and small lenders do not have that capacity,” he said. ““Regulatory relief has to be real and fast for smaller institutions because the rules are the same for them. Compliance slows down the process” and the economy.

    He said regulatory reform would help smaller lenders, mortgage companies, small business and start-ups.

    “Businesses are optimistic, post-election, that there will be an improvement in regulations, tax reform and other issues,” he said. “The reality to get it done remains solid.”

    Registration Deadline Approaching for AFSAEF’s The EDGE program

    AFSA Staff

    The registration deadline for the American Financial Services Association Education Foundation’s (AFSAEF) THE EDGE program is approaching. Members interested in registering for the program must do so by April 28.

    The 2017 dates for The EDGE program are June 4-9, 2017 at the Stetson School of Business and Economics at Mercer University in Atlanta, Ga.

    THE EDGE provides high quality training for branch managers and team leaders by providing layered modules of learning.

    Management I courses provide a sound basic knowledge for financial managers in time management, consumer lending, financial services law, communications, rates and profits, performance management and business ethics. Management II courses relate to financial statements, competitive environment, employment and financial services law, funding strategies, market strategies, the monetary system and effective coaching. The industry's top executives share their personal formulas to be successful in a fast-paced and ever-changing environment.

    More information, as well as a program brochure and registration information, is available at the AFSAEF website.

    New Member Welcome

    AFSA welcomes the following new Business Partners to the association.

    Consolidated Asset Recovery Systems Inc. is based in Raleigh, NC and is a provider of software and services for repossession management and remarketing.

    Newburgh, Ind.-based DM Metrics provides strategic consulting and best practices for risk & marketing.  Products include custom risk models & response models.

    Dot818, LLC is an online marketing network connecting lenders, storefronts, and affiliates based in Glendale, Calif.

    Elliott Davis Decosimo is a Greenville, SC-based firm providing assurance, tax and advisory services to its clients.  The firm has a significant emphasis on the financial services space.

    Mayer Brown is based in Washington, DC and is a global legal services provider advising clients across the Americas, Asia, Europe and the Middle East.

    Based in Concord, NC, Patriot Automotive Consulting is a full-service consulting firm for auto dealers and lenders.

    Trust Science, based in Edmonton, Alberta, Canada, uses patented algorithms to analyze publicly available digital information. Using sophisticated mathematical models, the firm processes this data to then determine the trustworthiness of individuals, business and organizations.

    Vehicle Information Services, Inc., based in Bath, Ohio, provides sophisticated, accurate information to financial institutions, leasing companies, attorneys, government agencies, consumers, and the insurance industry with information regarding vehicles and their values.

    AFSA Comments on Proposed Rule Implementing Colorado Innovative Motor Vehicle Credit

    AFSA recently submitted a comment letter to the Colorado Department of Revenue regarding its proposed rule implementing the Innovative Motor Vehicle Tax Credit, which sets forth procedures for financing entities processing and taking assignment of the credit. AFSA’s letter included an overview of the indirect financing process and requested clarity on residency requirements for claiming the credit and the definition of a financing entity.


    AFSA previously held calls regarding the tax credit with the Department of Revenue in January and the Colorado Energy Office last October and will continue to monitor the process and keep members apprised of any future changes to the proposed rule. The Department of Revenue has indicated that it plans to hold a rulemaking hearing on the rule in early May.

    AFSA Submits Letter Supporting APR Amendment

    AFSA Staff

    Last week, AFSA submitted a letter to House Financial Services Committee (HFSC) Chairman Jeb Hensarling (R-Tex.) supporting an amendment to his Financial CHOICE Act 2.0. The amendment would prohibit federal agencies from creating annual percentage rate (APR) calculations that differ from the APR calculations governed by the Truth in Lending Act (TILA). For decades, TILA has provided a clear standard for creditors and it should be preserved.

    The letter notes that some consumer advocacy groups have argued that instead of the traditional TILA APR calculation, creditors should use an APR calculation that includes charges for voluntary protection products (VPPs), such as credit insurance, that are sold in conjunction with the loan. Commonly referred to as “all-in APRs” these calculations artificially increase the cost of credit. VPPs are not a cost of credit under TILA because they are optional products that are not imposed on the consumer as a condition of obtaining the loan. VPPs are a separate and distinct charge as identified in TILA.

    The core objective of TILA was to help consumers shop for credit by being able to compare APRs across loans and creditors. However, by including VPPs in an APR calculation (which vary in cost and benefits) consumers lose the opportunity to compare products and make an informed decision on the actual cost of the loan.