New regs a 2012 wild card

Jim Henry is a special correspondent for Automotive News

Auto lenders are cautiously optimistic about 2012. But they're worried about the potential for new government regulations -- which could affect auto dealers.

"The one big potential cloud is the regulatory environment," said Marguerite Watanabe, president of consulting firm Connections Insights. She was scheduled to moderate a panel discussion today at the American Financial Services Association's Auto Finance Conference in Las Vegas.

While auto finance is not the No. 1 target of the new Consumer Financial Protection Bureau or its director, "the auto financing sources will continue to watch and listen for anything that will impact the auto financing industry," Watanabe said.

Organizers expect record attendance of 500 or more at the conference. It runs through Friday, just prior to the NADA convention.

The Consumer Financial Protection Bureau was high on the group's list of concerns in San Francisco a year ago, too. In 2011 the Federal Trade Commission held public roundtable discussions in which consumer advocacy groups sharply criticized auto lenders and dealers. But the bureau avoided giving specific signals as to any new rules it may have in store for auto lenders.

That could start to change now that the bureau has a director, Richard Cordray, who was appointed last month by President Obama. The bureau couldn't address nonbanks, such as captive finance companies and independent auto lenders, until it had a director.

The bureau is off to a late start and the world has changed a bit in the past 12 months. For example, U.S. auto sales are stronger, and credit availability has improved, including for the subprime segment.

But that still leaves a potentially threatening cloud on the horizon.

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