Agency wants a clearer picture of auto loan data

The Consumer Financial Protection Bureau says it wants to work with fellow agencies and the private sector to develop a new auto finance data set.

The CFPB said auto loans rank third among consumer credit segments behind mortgages and student loans, but it has far more information on those markets than auto.

More than 100 million Americans have an auto loan, collectively owing $1.5 trillion. Auto debt was on pace to grow larger than the nation's outstanding student loan balance in the first half of 2023, according to the CFPB. It also noted issues such as rising vehicle prices, monthly payments, loan amounts and delinquencies and the prospect of consumers being priced out of the market.

"While currently available data allows market participants to identify and measure certain trends, it's not sufficiently granular or complete enough to fully explore the cause of those trends," a Nov. 17 CFPB blog post stated. "Also, the rapid changes to the industry over the last few years have made visibility into market trends increasingly difficult."

The CFPB cited repossessions and subprime or deep subprime loans as areas lacking sufficient data.

"Without this holistic view, market participants are unable to identify emerging risks and opportunities as they occur. This could lead to negative consequences for consumers, lenders, and investors."

The CFPB will take public comment about auto loan data via various channels, including Regulations.gov, until Dec. 19.

Auto loan servicing and collections practices and subprime lending competition are two of the "three main issues ... that we're really paying attention to" in auto finance, CFPB senior markets and policy fellow Christopher Kukla told the Auto Finance Summit in Las Vegas in October. The third is affordable credit, said Kukla, one of the authors of the blog post as well as a post in February discussing those three areas.

Kukla said the agency also was interested in learning more about auto loan refinancing, noting it occurs relatively infrequently. CFPB Director Rohit Chopra in September said the agency was trying to increase auto loan refinancing, according to prepared remarks.