CFPB Sees Options to ‘Flat-Fee’ Dealer Payment
The Consumer Financial Protection Bureau (CFPB) seems to be open to solutions other than a flat-fee payment to dealers who provide financing assistance to their customers, according to an article in RV Executive Today Online.
At a recent forum, a CFPB official told the Recreation Vehicle Dealers Association (RVDA) and other industry attendees that the bureau “believes there could be a variety of alternatives” to combat what it perceives as a potential for lending discrimination.
Earlier this year, the CFPB said financial institutions could avoid discrimination by paying dealers a flat fee for arranging financing. However, the bureau tried to clarify that at the forum. “We cited flat fees only as an example,” said Patrice Ficklin, the fair-lending director at the CFPB. “In fact, the bureau believes that there could be a variety of alternatives.”
One option could be to pay dealers a set percentage of the amount financed on a vehicle loan, according to Eric Reusch, the CFPB’s program manager for vehicle and student loans. Another would be a “hybrid” system that takes into account the amount financed and the duration of a contract. His comments seem to indicate the bureau doesn’t want to prescribe a single form of dealer-assisted financing payment.
RVDA and its allies believe that dealer-assisted financing is enormously successful in increasing access to and reducing the cost of credit for millions of Americans.