CFPB Eyes Fixed F&I Prices for Auto Dealers
The Consumer Financial Protection Bureau (CFPB) is sending signals it may be interested in scrutinizing the value of F&I products purchased by consumers, relative to the cost of the products for auto dealers.
“Fixed prices for F&I products may be the end result for dealership groups that don’t already employ fixed prices,” said David Bafumo, president of FNI Inc. in Cary, N.C., a firm that consults with auto lenders and dealerships.
According to Automotive News, Bafumo said the CFPB’s consent order last month with Synchrony Bank, formerly GE Capital Retail Bank, in the credit card market has clear implications for lenders and dealerships that handle the sale of F&I products, especially those that cost dealerships little compared with what they sell them for.
It’s also possible the CFPB could apply the disparate-impact theory to add-on products, Bafumo said, and look for legally protected groups paying higher prices, as the bureau already is doing with indirect auto loans and dealer reserve.
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