RVDA: CFPB Hazy on ‘Indirect Financing’ Regs
The Consumer Financial Protection Bureau (CFPB) recently responded to a letter from 35 U.S. House members questioning the manner in which the agency developed guidance regarding indirect vehicle financing.
According to a report in RV Executive Today, the congressmen took issue with the CFPB’s “initiating a process without a public hearing, without public comment, and without releasing the data, methodology or analysis it relied upon to support such an important change in policy.”
The CFPB’s response left many questions unanswered, according to one industry analyst. On its decision to issue the indirect auto lending bulletin without public comment, the CFPB simply responded that the Administrative Procedure Act “does not mandate notice and comment for general statements of policy, non-binding informational guidelines and interpretive memoranda.”
“But the CFPB must realize how seriously its bulletins and other pronouncements are taken by the industry,” says Stephanie Jackman of Ballard Spahr LLP, who writes about the issue for the CFPB Monitor. “Failing to heed the CFPB’s ‘non-binding guidance’ risks significant repercussions during an examination or enforcement action.”
Spahr says there is “simply no other reasonable way to interpret the CFPB’s recent indirect auto finance guidance other than as a specific directive to completely overhaul the industry’s dealer participation method of compensation or implement an across-the-board flat fee program that may carry significant competitive disadvantages for any entity that adopts it.”
Dealers can find out more about the CFPB’s guidance during an Oct. 4 workshop at the RV Dealers International Convention/Expo in Las Vegas. Wolters Kluwer attorney Chip Zyvoloski will present “CFPB Guidance and Rate Markups: Do You Understand Your Roles and Responsibilities?” from 9:15-10:30 a.m. To register for the convention, click here.