Auto Loan Growth Continues, Chamber Of Commerce Calls For Lending Rules
Just as total auto loan balances in Q4 2013 climb to $798.5 billion, the United States Chamber of Commerce has called upon the Consumer Financial Protection Bureau to draw up a detailed compliance guide for auto lenders returning to the fray.
Automotive News reports Experian Automotive saw $798.5 billion in total auto loan balances for Q4 2013, the highest recorded by the credit reporting bureau since the first numbers were published in 2007. Thirty-day delinquencies in the same period fell to 2.6 percent from their previous peak of 2.7 percent in 2012, though subprime loans — the source of most delinquencies — accounted for 36.2 percent of all outstanding loans, up from Q4 2012’s 35.7 percent.
Meanwhile, the U.S. Chamber of Commerce has tasked the CFPB with building a detailed compliance rulebook meant to standardize lending procedures and liabilities for collection actions undertaken by service providers. The request comes on the heels of a December 2013 consent order between the CFPB, Ally Financial and the U.S. Department of Justice, where the lender paid $98 million in restitution and penalties in a settlement regarding the use of the dealer reserve to issue higher interest rates on minority borrowers.
Comments
Join the conversation
"I can totally afford this car, thanks to all the money I save by cutting my own hair!"
"I see here on the lease agreement, that once we sign, that you are required to abuse my pretend girlfriend in all the biblical ways, that we are to all attend a donkey show in TJ and participate in the act. I'd like to amend the contract to say that we will attend said donkey show for a minimum of 4 hours."
Why does every stock photo of a car dealer feature a salesman in a suit and not a polyester golf shirt and khakis? The only dude in a suit I've ever seen in a car dealership is me when I'm stopping in on the way home from work.
As a teenager in Australia in the 70s I do remember it was impossible to obtain a new car loan that exceeded 48 months and a used car loan exceed 36 months. This seemed to be commonsense. Back then a person couldn't get a home loan with a monthly repayment that exceeded 25% of his pre taxed income. I do think lending standards should be toughened, maybe not back to those levels, but to levels that are more responsible. I can see the people who claim we live in a free society, but sometimes the free need to be protected from themselves. Banks and other forms of financial services to have a duty of care, a responsibility for the consumer. So, is it better to have an industry that's irresponsible or an individual. Which one will do the greatest harm to a nation?