The Federal Trade Commission (FTC) Act makes unfair and deceptive acts and practices (UDAP) unlawful and empowers and directs the FTC to prevent such acts and practices through rule-making and enforcement. The Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") provided clear FTC jurisdiction over most auto dealers, particularly when entering into finance transactions with consumers, while freeing the FTC from the cumbersome procedural requirements that otherwise apply to FTC UDAP rule-makings. In easing these requirements, Congress signaled its intent that the FTC use...
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The Center for Responsible Lending, Consumer Federation of America, Consumers for Auto Reliability and Safety, the National Association of Consumer Advocates, the National Consumer Law Center, and on behalf of its low-income clients the National Council of La Raza have filed the following comments to the FTC in regards to the current state of auto lending and the recent motor vehicle roundtables held across the country. In the particular, the comments urge the FTC to: Prohibit auto dealer interest rate markups; End yo-yo scams; Curb loan packing; and Implement steps to ensure that dealers do...
This case involves borrowers who purchased a vehicle through a dealership in California. The financial institution in question, Wachovia, did not make the loans, but later purchased the installment contracts from the dealer. When the borrower fell behind on their payments, Wachovia repossessed the cars without properly following California law. California allows self-help repossession, but has strict rules regarding consumers' rights in repossession, including the notices that a creditor must send to consumers.
CRL and the National Consumer Law Center filed an amicus brief supporting appellant Donna Epps in regards to the improper repossession of the appellant's vehicle.
Rate Markups Cost Americans $25.8 Billion Over the Lives of Their Loans Download the Full Report (PDF) >> Download the Executive Summary (PDF) >> Rate Markup Volume Per State (Web Page) >> Costly Service The average dealer rate markup is $714 per loan. Learn what that may mean to a consumer's pocketbook . Cars are the most common nonfinancial assets held by Americans. For most families, owning a car is not merely a luxury, but a prerequisite to opportunity.Cars not only provide transportation, but also options for where to work and live, and how we all interact with our communities.As a result...
Dealer Markups Alone Cost Americans $25.8 Billion Over the Lives of their Loans Predatory practices in auto financing force consumers to struggle not only for a competitive and affordable loan, but for a fair and honest one. Finding a good deal is no longer based on the quality of the car or the creditworthiness of the customer, but rather the customer's ability to survive a financial shell game with one of the largest investments most Americans will ever make. The following are some of the most harmful abuses created by such financial shell game ( click on each one to find out more ) : DEALER...
The auto dealer lobby successfully fought to receive a special exemption in the House from the rules of the Consumer Financial Protection Bureau (CFPB) in the financial reform bill even when the dealers act as creditors and brokers on car loans. But fair, honest and ethical competition requires a level playing field, as well as a fair and consistent system for accountability.
Reconciling H.R 4173 and S. 3217 During recent years, regulators stood by and allowed the most costly reckless lending in history, largely because they were heavily influenced by the very businesses they were supposed to oversee. Lax regulation has already cost trillions of dollars. For the final financial reform bill, these four issues will be vital in protecting taxpayers from another crisis in the future: To be successful, the new CFPB needs an independent source of funding and a fair and transparent rule-making process. CFPB must be able to write rules across industries. And new mortgage...
A brief by the National Consumer Law Center shows state-by-state markups on auto loan rates by race, revealing wide disparities between costs for African-American and white car buyers.
The current financial system has left America's families, its military, its community banks, and its responsible auto dealers unprotected from the minority of dealer-lenders who sell unfair auto loans with hidden fees. Such practices can tarnish the reputation of the entire industry. Exempting irresponsible dealers would help Wall Street at the expense of America's families and honest dealers and lenders. As President Obama said in a speech on financial reform on April 22, 2010, "unless your business model depends on bilking people, there is little to fear from these new rules." "You have an...