CFPB, FTC actions speak louder than words

Jim Henry is a special correspondent for Automotive News.

While the Consumer Financial Protection Bureau barely mentioned autos, its recent actions and a big fine announced Tuesday by the Federal Trade Commission speak loudly to auto lenders.

The message: The CFPB and FTC expect lenders to monitor companies that work for the auto lenders, such as bill collectors, and dealers.

The CFPB said that starting today it is expanding its consumer complaint database to include complaints about collection efforts. That includes collection-related complaints stemming from any category of consumer debt, including credit card debt, mortgages, medical bills, student loans -- and auto loans.

That doesn't apply specifically to dealers. But earlier warnings from the CFPB do. For instance, the CFPB is focusing on disparate impact, the legal theory that lenders enable the opportunity for discrimination when they allow dealers to set the final interest rate for consumers.

The FTC's $3.2 million fine this week against a bill collection company underscores the more general notion that federal regulators are going after suppliers to lenders in consumer finance.

The fine comes on the heels of the CFPB's recent consent orders with U.S. Bank and Dealers' Financial Services. The bureau said the companies had failed to properly disclose all the fees charged to participants in their Military Installment Loans and Educational Services auto loan program. U.S. Bank has since exited the program.

The consent orders were squarely aimed at the auto finance sector. The FTC's fine is only suggestive, but it's highly suggestive of what the feds expect of auto lenders and companies acting in their behalf.

You can reach Jim Henry at autonews@crain.com

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