As Auto Delinquencies Rise, CFPB Seeks to Cut Oversight

Financial Services attorney Eamonn Moran was quoted in an American Banker article detailing implications of the Consumer Financial Protection Bureau's (CFPB) proposal to reduce oversight of auto lenders. Acting CFPB Director Russell Vought in August issued a proposed rule that would raise the threshold for auto finance companies to fall under CFPB supervision from those that issue 10,000 loans a year to 1 million loans a year. If implemented, the change would cut the number of lenders under bureau oversight from 63 to five, as well as possibly eliminate oversight of all subprime lenders. Mr. Moran commented this could "[put] the brakes on wrongdoing" at a time when subprime auto loan delinquency rates have hit record highs and highlighted other ways it could affect the agency's ability to address issues in the market.

"Without supervising as many players in the auto finance sector, the CFPB may lose valuable insights into the internal practices of some of the market's key players," he said.

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