RVDA, Industry Reps Challenge CFPB Guidance
Industry representatives expressed major concerns about Consumer Financial Protection Bureau (CFPB) guidance on dealer-assisted financing during a forum the agency held on Nov. 14 in Washington, DC.
According to a press release, the Recreation Vehicle Dealers Association (RVDA) was among those in attendance at the forum, where dealer and lender representatives questioned the CFPB methodology used to determine that dealership participation in interest rates on vehicles loans could create a “significant risk” of discrimination.
RVDA and its allies argue that the CFPB has not released the complete statistical methodology it uses to determine whether discrimination is present in vehicle finance. For example, it is unknown if the analysis accounts for variables such as credit score, the amount financed, term of the loan, or special finance incentives.
The CFPB has also acknowledged that the agency has not studied the potential impact its guidance on dealer-assisted financing could have on the broader vehicle market or whether that guidance could limit credit availability.
“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,” the release stated.
In another development this week, the American Financial Services Association (AFSA) is launching an independent study into the effects of the indirect lending model on consumers and the industry.
AFSA, a Washington, D.C.-based trade association that includes many auto and RV lenders, said the study would include an analysis of the costs and benefits of the status quo versus changes, such as flat fees, outlined by the bureau.
For RVDA’s position on this issue, please click here.