Auto Lenders Worried about Consumer Financial Protection Bureau

An auto lenders trade group says it’s somewhat reassured by what staffers from the new Consumer Financial Protection Bureau are telling it. But they’re still anxious about how the new regulatory body will carry out its mandate.

Last week, members of the American Financial Services Association met privately with bureau representatives during the AFSA Vehicle Finance Conference here. Association members who attended those meetings said the bureau assured them that it will base decisions about regulations on data, taking industry input into account, and will not “shoot from the hip” based on anecdotal evidence.

Auto dealers — excepting buy-here, pay-here stores — are exempt from direct supervision by the bureau. But any new requirements for auto lenders are bound to affect dealers, too.

What might the Bureau be looking at?  Based on questions raised in other forums and the bureau’s dealings with other types of lenders, the bureau is interested in creating new and more transparent loan documents. In auto lending, that could include disclosures about dealers’ taking a slice of the profits on interest rates.