CFPB fills auto finance liaison job

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The Consumer Financial Protection Bureau has appointed attorney Jeffrey Langer to the role of liaison between the CFPB and the auto finance industry, succeeding Rick Hackett.

Langer’s appointment, announced Wednesday, was effective immediately.

One of his key responsibilities will be to act as the CFPB’s contact person with auto lenders -- a hot seat at the bureau since the beginning of its campaign to eliminate what it considers discrimination in auto lending.

The CFPB’s major push so far has been to seek to eliminate dealer discretion in setting dealer reserve. Dealer reserve, or dealer markup, is the small amount of interest that lenders allow dealerships to add to the lender’s interest rate on a car loan to compensate the dealership for helping to arrange the loan.

According to the CFPB, dealership discretion in setting the dealer reserve can result in a disparate impact, or higher rates, for legally protected borrowers, including minorities. Lender and dealer groups deny tolerating discrimination and question the CFPB’s methodology for identifying discrimination.

Langer leads a team that monitors and analyzes developments within student, auto and other consumer lending sectors, as well as debt collection. The post carries the official title of assistant director for the Office of Installment and Liquidity Lending Markets in the CFPB’s Research, Markets and Regulations Division.

Most recently Langer was senior counsel at Macy’s Inc. in Mason, Ohio, a post he left in January. His responsibilities there included compliance for credit card programs. He also has served as a partner in several law firms in Illinois and Ohio. CFPB Director Richard Cordray is the former Ohio state attorney general.

“Jeff Langer comes highly regarded to the post,” said Bill Himpler, executive vice president for the American Financial Services Association, a Washington-based lender group whose members include captive finance companies, banks and independent finance companies in auto lending.

“I think he brings a lot to the table in terms of helping the CFPB gain a better understanding of the industry they’re tasked with overseeing,” Himpler said.

While the CFPB has been active in the auto finance sector -- the bureau reached a consent agreement with Ally Financial in December in which Ally agreed to pay $98 million in restitution and penalties for what the CFPB determined to be higher rates of dealer reserve for black, Hispanic and Asian-Pacific Islander borrowers -- Langer’s post at the CFPB had been vacant since Hackett left in August.

Hackett announced in June of last year that he was “winding down” his day-to-day responsibilities. He had received high marks for his acumen in auto finance law and as a straight shooter from trade groups representing auto lenders and dealers.

Effective this month, Hackett joined the Portland, Maine, office of Hudson Cook law firm, based in Hanover, Md. The firm specializes in consumer finance law for auto dealers and auto lenders.

You can reach Jim Henry at autonews@crain.com.

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