The National Consumer Law Center submitted comments, co-authored by the Consumer Federation of America, to the Consumer Financial Protection Bureau regarding the Bureau’s notice that it is considering amending which participants in the auto finance market are considered larger participants. Entities defined as larger participants are potentially subject to supervision by the CFPB and the Bureau is considering changing the test to reduce the number of entities it can supervise. We oppose reducing the number of auto finance entities the Bureau supervises.
Supervision is an important tool that helps the CFPB ensure that entities that finance car purchases comply with the law and lets the Bureau stop problems and identify emerging issues in this important area. The Bureau currently only identifies 63 of thousands of creditors as being larger participants in the auto finance market subject to supervision. In its notice the Bureau suggested it was considering changing the rules so that as few as 5 of the thousands of creditors could be subject to supervision.
Instead of reducing the number of entities it can supervise, the Bureau should consider expanding the rule to ensure it is able to supervise larger participants in different categories of auto finance entities that operate very differently from each other such as subprime finance companies and Buy Here Pay Here Dealers.
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