Trade Group: CFPB Non-Bank Oversight Threshold 'Too Low'

Cameron Aubernon
by Cameron Aubernon
We’re committed to finding, researching, and recommending the best products. We earn commissions from purchases you make using links in our articles. Learn more here
trade group cfpb non bank oversight threshold too low

A trade group representing lenders is finding the Consumer Financial Protection Bureau’s proposal to regulate non-bank auto lenders too much to bear.

According to Automotive News, the American Financial Services Association says “the threshold the CFPB proposes for larger participants in the automobile finance market is too low,” and could disproportionately drive up compliance costs, push out smaller lenders from the auto finance game, and make things more difficult for the consumer as far as credit goes.

The threshold in question defines said participants as those originating 10,000 or more auto loans and leases in a given year, a definition that could fit 38 lenders representing 91 percent of all non-bank institutions. The AFSA suggests a threshold of 50,000 loans and leases in a given year, excluding smaller players while putting the oversight upon 17 lenders, or 86 percent of the non-bank market.

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

More by Cameron Aubernon

Join the conversation
  • Xeranar Xeranar on Dec 11, 2014

    So the difference of 7% of the total market and 21 lenders is at stake? Interesting. The regulatory back end may make sense to lift the threshold as greater competition is worthwhile but on the same token if those 21 lenders are using unregulated techniques to exploit that 7% of the market that's not a worthwhile movement. The complexity of the question is so far beyond this soundbite that to have any real analysis on it is impossible without further review.

  • Felix Hoenikker Felix Hoenikker on Dec 11, 2014

    Sleazy lenders watch out. Elizabeth W is watching you!

  • J.Emerson J.Emerson on Dec 11, 2014

    So what's the endgame here? Most likely, the large lenders would figure out a way to restructure their operations so that they'd all fall below the 50,000 threshold. These types of "suggestions" tend to be more about evasion than anything else.

    • Highdesertcat Highdesertcat on Dec 11, 2014

      "These types of “suggestions” tend to be more about evasion than anything else." I agree. But Xer is also right. This is far more complex than what is covered here. It's all about making money, any which way they can. They win a few, they lose a few. The end result must be to win more than they lose in order to make money. With too much regulation, we may see fewer people qualify for any kind of loans. And that would hurt the US economy. So, the bottom line is for the CFPB to tread lightly.

  • 1998S90 1998S90 on Dec 11, 2014

    Cockroaches tend to scatter when you shine the light on them.