Deal Pack Blog
Larger Dealerships will now be overseen by the CFPB
A new rule passed recently that affects larger dealerships within the subprime industry. The Consumer Financial Protection Bureau (CFPB) will now be the oversight board for nonbank finance companies who make, buy or refinance more than 10,000 loans per year. These companies originate about 90% of the loans generated in the subprime industry. In 2013, these companies provided financing to about 6.8 million consumers.
Dealerships that participate in a high volume of loans are considered larger participants in the subprime industry and have never been supervised before. The reason behind this new rule is because the CFPB found discriminatory practices in banks’ lending money for vehicles; they want to make sure that nonbank finance companies are not engaging in the same activity. They want to make sure all consumers are treated the same across the board and to implement this, the CFPB will now oversee the larger companies within the subprime industry. If your company engages in over 10,000 loans per year, new rules are now in effect; make sure to always keep updated with the latest changes to ensure your business is following best practices.