Sens. Elizabeth Warren (D-MA) and Sherrod Brown (D-OH) are encouraging the Consumer Financial Protection Bureau (CFPB) to increase oversight measures regarding the auto loan market.
Warren and Brown recently forwarded correspondence to CFPB Director Kathy Kraninger on the matter, citing trending high levels of debt, record delinquencies, and abusive practices by lenders. Threats to consumers and the economy from such a debt market could explode soon as coronavirus-related downturns put strains on consumers, the senators added.
“Regrettably, the Bureau has not taken meaningful action to combat these trends during your tenure as Director,” the lawmakers wrote in their letter Kraninger. “[T]he CFPB has not issued a comprehensive report on this issue since 2017 and has not taken a single enforcement action against any auto lenders since 2018. Of the 15 public enforcement actions related to auto lending since the creation of the Bureau, none have occurred during your tenure as Director.”
The legislators maintain auto loans are the third-largest category of consumer debt, behind mortgages and student debt – noting the level of debt has been growing in recent years.
“While the agency does not have the authority to examine directly the practices of auto dealers, it does have the authority — and the responsibility — to examine the auto lending companies and financial institutions that provide auto loans,” the lawmakers, who have requested responses to their letter by March 26, 2020, concluded. “The CFPB’s role in overseeing this market is especially important given the substantial and growing role of non-bank and non-credit union members, as no other regulator has jurisdiction over these entities’ consumer protection practices.”