Today's Headlines

    Regulators, Auto Lenders Dig Into Customer-Refunds Process

    Wall Street Journal, Emily Glazer & Anna Maria Andriotis (August 28, 2017)

    In the wake of recent problems at financial institutions, regulators are reviewing some auto-lending procedures, including those that deal with guaranteed asset protection products (GAP) and the refund process associated with them.

    The Consumer Financial Protection Bureau (CFPB) is looking at captive finance companies as well as banks and, according to those familiar with the investigations, looking at their internal controls and refund processes.


    In July, AFSA”s state government affairs department released a 50-state survey entitled “Refunding Unearned Gap: Creditor Obligations. This document is available to members in the SGA Resources area of the AFSA website.

    AFSA participates in Houston-based automotive radio show

    AFSA Staff

    Jack Ferry, AFSA’s VP of Communications, recently appeared on a Houston-based weekly automotive radio show called “In Wheel Time,” which is also broadcast on satellite on the sports-related SB Nation network.

    In a five-minute, live segment with host Mike Marrs, Ferry outlined AFSA’s role and its long-standing relationship with the automotive finance industry. He also discussed with Marrs the consumer advantages of dealership financing and the pros and cons of leasing versus purchasing a new vehicle.

    Scott Powell Appointed President And Chief Executive Officer Of Santander Consumer USA Holdings Inc.

    Press Release, Santander Consumer USA Holdings Inc. (August 28, 2017)

    The Board of Directors of Santander Consumer USA Holdings Inc. (SC) on August 28 announced that Scott Powell will succeed Jason Kulas as President and Chief Executive Officer, effective immediately. Powell will continue to serve as CEO of Santander Holdings USA, Inc. (SHUSA) and as Santander Group's United States Country Head. After more than a decade of service to SC, Kulas is stepping down to pursue other opportunities.

    Powell was appointed CEO of SHUSA in 2015 and has served on SC's Board of Directors since 2016. He brings extensive auto and risk management experience from more than three decades working in retail banking, risk management and consumer and auto lending. Prior to joining Santander, Mr. Powell held a variety of senior roles at JPMorgan Chase & Co., including Head of Banking and Consumer Lending Operations, CEO of Consumer Banking and Retail Investments, Head of Retail Lending, Head of Chase Auto Finance, and Chief Risk Officer, Consumer. He also spent 14 years at Citigroup and its predecessors in a variety of senior risk management roles.

    AFSA Supports FCC Efforts on Reassigned Numbers

    AFSA Staff

    On Aug. 28, AFSA sent a letter to the Federal Communications Commission (FCC) supporting its efforts to address the issues that arise when calls are made to phone numbers that have been reassigned from one consumer to another. AFSA wrote, “Reassigned phone numbers create a minefield of problems for users of automatic telephone dialing systems …. We appreciate the FCC’s recognition of this difficult situation and proposal to address it through a database.”

    The FCC has proposed the development of a database for callers to verify whether a number has been reassigned. The FCC issued a request for comment inquiring about the best ways for service providers to report information about reassigned numbers and the ways that the information can be made available to callers.

    AFSA believes that such a database could be helpful in reducing the number of frivolous Telephone Consumer Protection Act lawsuits.

    SourceLink Webinar Stresses Landing Pages as Critical for Lenders

    AFSA Staff

    Yesterday, AFSA’s Business Partner Webinar program played host to “Five can't fail landing page strategies for lenders,” presented by SourceLink.

    The webinar explored the role website landing pages have in the current lending landscape, and how simple online applications can be greatly enhanced by using testing strategies with landing pages.

    Presenter Stephane Gringer, Vice President, Digital Solutions with SourceLink, discussed the importance of having a responsive design and channel specific pages for narrowing message content. Additionally, he touched on the topic of cognitive overload. Presenting a user with too many options can be a detriment that said it can actually be better to have more white space on a page. The most important takeaway was the importance of testing.

    A recording of the webinar, along with the slides, as well as past recordings and a list of other upcoming webinars can be found in the AFSA Webinar Resource Center. For more information, contact Dan Bucherer, Communications Manager, at dbucherer@afsamail.org.

    Judge dismisses CFPB lawsuit against payment processors

    American Banker, Kate Berry (August 25, 2017)

    U.S. District Judge Richard W. Story last week dismissed a lawsuit brought by the Consumer Financial Protection Bureau (CFPB) accusing several payment processors of acting illegally when process payments for debt collectors. The judge also admonished the bureau for acting in “bad faith.”

    Many viewed the case, which stemmed from a lawsuit filed in March of 2015, as an example of the overreach of the bureau. The suit argued the payment processors should have known that debt collectors were trying to illegally collect on debts that consumers didn’t owe.

    "The CFPB has put up as much opposition as possible at every turn," Judge Story wrote. "The deposition transcripts show that the CFPB’s approach comes in two forms. The first is to bury the defendants in so much information that it cannot possibly identify, with any reasonable particularity, what supports the CFPB’s claims. The second is to assert privilege objections to questions that the court has repeatedly ordered to be answered. Neither form is proper, and together they demonstrate a willful disregard of the court’s instructions."

    The bureau declined to comment.

    Consumer Watchdog to Scale Back Payday Rules

    Wall Street Journal, Yuka Hayashi (August 25, 2017)

    The Consumer Financial Protection Bureau (CFPB) is expected to scale back its new rule on small-dollar lending as it rushes to complete the regulation before a Trump appointee takes over its leadership. Director Richard Cordray’s term is set to end in July of 2018 but a number of people think he may resign soon to run for Governor of Ohio.

    Faced with this pressure, the bureau has reduced the scope of the rule to focus on short-term payday loans, those less than 45 days. According to those familiar with the rule, loans lasting longer than 45 days are likely to be excluded.

    The rule is currently undergoing peer review from other regulatory agencies.

    “This would be a validation by the CFPB of what we’ve been demonstrating for years: that traditional installment loans are beneficial to consumers,” said Chris Stinebert, chief executive of the American Financial Services Association, a trade group for installment lenders.

    A ruling on short-term loans is expected in September. The CFPB may revisit loans of longer term later. Consumer groups have also express support for the plan. “I think it’s a major step forward,” said Ed Mierzwinski, federal consumer director at advocacy group U.S. PIRG. “If we can rein in one part of the industry but not the other, why not?”