On February 24, 2022, the CFPB announced it published a blog regarding auto lending. This announcement was followed by a February 28, 2022 press release in which the CFPB stated it was moving to “thwart illegal auto repossessions.”
Since the cost of automobiles continues to increase, the CFPB expects the total amount of debt and the average loan size to increase, putting additional pressure on consumers’ budgets. Further, due to the high price for used cars, the CFPB is concerned that lenders and servicers might be incentivized to repossess cars. The CFPB is particularly concerned about potential incentivization since, in previous examinations and enforcement actions, they observed illegal seizure of cars, sloppy record-keeping, unreliable balance statements, and ransom for personal property found in vehicles.
The CFPB is also interested in preventing disparate impacts on minority communities. In its view, the current economic recovery is uneven, and some consumers have been hit harder economically due to the pandemic. The CFPB is also concerned that technology used by lenders to repossess cars more quickly may disproportionately impact minority communities.
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