Latest Auto Lending News
Here are the latest news in the world of consumer auto lending. Stay informed on the latest practices affecting the cost of your next car loan and vehicle.
- Charlotte Car Dealership Accused of Predatory Lending Practices Against Blacks
Associated Press 13 Jan 2014
The federal Department of Justice, along with state prosecutors in North Carolina, has filed suit against a pair of "buy here pay here" auto dealerships that are charged with preying on African ...
- Subprime Auto Market Heats Up, Loan Standards Weaken
American Banker 13 Jan 2014
A new report from Moody's on the auto finance sector indicates that lenders are loosening their underwriting criteria as demand for vehicles grows. In particular, they are approving more poor-credit borrowers, with the volume of subprime auto loans climbing 9 percent at credit unions and 1 percent at banks during the third quarter.
- FTC Cracks Down on Deceptive Auto Dealer Ads
USA Today 09 Jan 2014
Nine U.S. auto dealers with operations in six states have agreed to settle with the Federal Trade Commission (FTC) as part of the agency's campaign against shady dealer advertising. The dealers allegedly made misrepresentations such as deceptive low-payment deals; and some advertised zero-down finance deals that, in fact, carried sizable fees.
- Ally Pays $98M to Settle Car Loan Bias Charge
USA Today 20 Dec 2013
The Consumer Financial Protection Bureau (CFPB) and the Department of Justice on Dec. 20 ordered Ally Financial and Ally Bank to pay $80 million to borrowers and $18 million in penalties in the largest auto loan discrimination settlement in history. More than 235,000 African-American, Hispanic, and other minority car loan borrowers allegedly received unfair interest rates through Ally Financial, according to federal regulators.
- Auto Loan Balances -- and Delinquencies -- to Rise in 2014: Report
U.S. Banker 13 Dec 2013
TransUnion released a forecast on Monday concluding that 2014 will be a mixed bag for automobile lenders, with both delinquency rates and loan balances expected to rise. The auto loan delinquency rate has been steadily increasing since hitting a post-crisis low in mid-2012, and TransUnion expects the slow climb to continue next year. The credit bureau projects the rate of borrowers 60 or more days past due to rise to 1.19 percent by the end of 2014, from an estimated 1.10 percent at the end of this year.
- Scrutiny Over Disparity in Loan Fees at Auto Dealerships
New York Times 22 Nov 2013
Auto dealerships often arrange loans for car buyers through third-party lenders, deciding how much they want to charge for that service and tack their fee onto the lender's interest rate. The National Automobile Dealers Association says franchise dealers typically do not charge more than 1 percent interest on average, but some consumer groups say that average fees range from 2 percent to 2.5 percent, depending on the terms.
- Dealer Fees for Arranging Car Loans Are Drawing Scrutiny From U.S.
New York Times DealBook Blog 22 Nov 2013
For the 80 percent of consumers who need financing when purchasing a car, many U.S. dealers arrange loans via third-party lenders. Dealers decide how much they want to charge for that service and add the fee to the lender’s interest rate. Because dealerships do not have to disclose how much of the interest rate goes to them, many consumer advocates and regulators have raised concerns about discriminatory lending against minorities.
- Justice Department Teams With CFPB in Probe of Possible Discriminatory Auto Financing
Washington Post 15 Nov 2013
Government regulators are launching efforts to prevent car dealers from jacking up the cost of financing to women and minorities. Dealers can mark up the interest rate on vehicle loans arranged through lenders, which can increase the profit on a sale by hundreds of dollars. Advocacy groups have been warning, however, of disparities in the number of black and Latino borrowers subjected to these higher fees; and they question whether the practice is tantamount to illegal, unfair lending.
- Cordray Vows 'Openness' with Auto Lenders
American Banker 13 Nov 2013
Consumer Financial Protection Bureau Director Richard Cordray acknowledged concerns Nov. 12 about how the agency is regulating indirect auto lenders, promising to be more transparent about its oversight.
- Ally Financial Warns of Auto-Lending Probe
Wall Street Journal 06 Nov 2013
Ally Financial Inc. disclosed this week in a regulatory filing that the Consumer Financial Protection Bureau (CFPB) is increasing its scrutiny over its auto lending practices. The agency has notified Ally that it had not taken adequate steps to prevent auto dealers from violating laws against lending bias, according to the filing.