CFPB to Regulate Larger Nonbank Auto Lenders
The CFPB is proposing to oversee larger nonbank auto finance companies for the first time at the federal level. Currently, the Bureau supervises large banks making auto loans, but not nonbank auto finance companies. The CFPB is proposing to extend its supervision authority to the larger participants of the nonbank auto finance market. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), the CFPB has authority to supervise certain nonbanks the Bureau defines through rulemaking as “larger participants” in a market.
The proposed rule would generally allow the Bureau to supervise nonbank auto finance companies that make, acquire, or refinance 10,000 or more loans or leases in a year. The Bureau estimates that about 38 auto finance companies would be subject to this new oversight. The CFPB believes these companies originate around 90 percent of nonbank auto loans and leases, and in 2013 provided financing to approximately 6.8 million consumers.
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