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Changing language to avoid CFPB trouble

Jim Henry is a special correspondent for Automotive News.

Dealers' Financial Services, whose MILES program provides auto loans and F&I products to military members, has changed the disclosure language on its Web site, MILES stands for Military Installment Loans and Educational Services.

The site's new language emphasizes that extended-service contracts and GAP are optional and cancellable.

Other lenders and dealerships may want to check out the new disclosure language because those were two points the Consumer Financial Protection Bureau stressed in consent orders with Dealers' Financial and then-partner U. S. Bank in June.

U.S. Bank has since dropped its participation in the MILES program. Dealers' Financial lists Flagship Credit Acceptance, of Chadd's Ford, Pa., as a lender on the site.

The CFPB said in June that Dealers' Financial, U.S. Bank and their dealers didn't always adequately disclose pricing and fees on add-on products or the fact that customers didn't need to buy the extras to get approved for a loan.

The Dealers' Financial site added this language about vehicle service contracts to its FAQ online: "Note a VSC is optional, cancellable (see policy terms) and in no way required to obtain credit." The site uses similar language with respect to GAP.

Lenders wishing to avoid issues with the CFPB may want to give the site a look.

You can reach Jim Henry at

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