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In a move to bridge significant data gaps identified through its February 2023 Auto Finance Data Pilot where it sent information requests to nine large auto lenders about their lending portfolios, the Consumer Financial Protection Bureau is requesting comments for the collection of additional auto financing data. As with its prior requests, the Bureau is issuing these orders under its market monitoring authority which allows it to “gather information from time to time regarding the organization, business conduct, markets, and activities of covered persons and service providers.” 12 U.S.C. C. § 5512(c)(1) & (4). Compliance with the requests is mandatory.

The two-fold annual data collection process includes:

  • Comprehensive data from large lenders. Lenders originating over 20,000 auto loans in the previous year will submit comprehensive loan-level data, mirroring the original order’s scope.
  • Limited data from smaller lenders. Lenders with 500 to 20,000 loan originations will report on specific metrics like the number of vehicles repossessed and the number of loan modifications.

Putting it into Practice: With an estimated 4,000 auto finance companies on its radar, the Bureau’s expanded request is designed to collect a wealth of information that will enhance the CFPB’s ability to monitor the auto finance market for risks to consumers. As we discussed previously (here, here, and here), the Bureau is focused on the rise of auto prices and the impact it has had on borrowers’ loan amounts, monthly payment amounts, delinquencies and repossessions. The Bureau is also seeking to learn more about auto lenders that operate in the subprime space and that offer vehicle add-on products. As we have seen with this CFPB, market monitoring orders are often a precursor to formal rulemaking. Accordingly, auto lenders should pay careful attention.