Update: Consumer Financial Protection Bureau Proposes Auto Lender Data Collection Initiative Expansion

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The Consumer Financial Protection Bureau (CFPB) is proposing an expansion of the auto lender data collection initiative that was first announced in February 2023. Now concluded, the auto lender data collection pilot required nine major auto finance companies to submit data on a wide variety of auto lending practices and activities. As part of the proposed auto lender data collection program expansion, the CFPB embarked on a request for comments period which is now closed.

Auto Lender Data Collection Program Impact

If the proposed expansion is approved by the Office of Management and Budget (OMB), the CFPB estimates that its new data collection program would requisition data from approximately 4,000 auto finance companies, collectively costing these companies an average of 1,375 hours in labor per year.

Industry advocates believe the cost in hours will be significantly higher. In a letter sent on March 22 by American Financial Services Association, joined by American Bankers Association, America’s Credit Unions, Consumer Bankers Association, and U.S Chamber of Commerce, the organization expressed its concerns regarding the initiative and stated that this reporting for each loan could take “hundreds, if not thousand, hours.” It remains to be seen if the Bureau will modify its proposal.

The amount of data each company would be required to submit would depend on the number of loans it issued in the prior calendar year as outlined in the two tiers below:

  1. Greater than 20,000 Loans: Extensive data related to each transaction in the previous calendar year. Data points could include a consumer’s:
    • Total down payment and sales tax charged.
    • The amount financed and the loan-to-value ratio.
    • A detailed breakdown of additional charges paid by the consumer, such as the costs for GAP waivers and service contracts.
  2. 500 and 20,000 Loans:
    • Only data related to automobile repossessions and loan modifications.

The CFPB did not link or attach a list of data points to its request for comment in the Federal Register. However, the notice states that, “this data collection would mirror that which was collected in the Auto Finance Data Pilot.” *

What Happens Next

In compliance with the Paperwork Reduction Act, the CFPB must take the following steps:

  1. Review all public comments.
  2. Submit an Information Clearance Request to the Office of Management and Budget (OMB).
    • This request includes a package of documents containing sample forms, authorizing statutes, explanatory materials, and other items.
  3. The request must also be noticed on the Federal Register, providing stakeholders with another opportunity to comment in support of or opposition to the project.

The OMB traditionally makes its decision on a proposal within sixty days. If approved by the OMB, the expansion of this project will have a significant administrative and reporting impact on auto finance companies.

F&I Sentinel is the industry’s trusted provider of managed compliance solutions that help auto lenders navigate the regulatory landscape surrounding the financing and resolution of vehicle protection products. Contact a member of the Concierge Compliance Team for more information.


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