On February 23, 2023, the Consumer Financial Protection Bureau (CFPB) announced it had issued orders to nine large auto lenders to provide information about their auto lending portfolios. The auto lenders chosen are said to represent a cross-section of the auto finance market and the data collected from these auto lenders will help the CFPB “build a quality data set that provides insights into lending channels, loan performance, and inform potential future data collection efforts.” A sample order can be viewed here. The requests within the order ask for detailed loan level data regarding originations and servicing from January 1, 2018 through December 31, 2022.
The CFPB has been collecting public input and held an auto finance data stakeholder event in December 2022 with market participants, fellow regulatory agencies, other Federal Reserve officials, market analysts, and consumer researchers and advocates to gather input on the current data landscape. According to the CFPB, three areas of focus have emerged from these discussions:
- Lending Channel Differences. Currently, data is generally not broken down by whether the consumer secures financing for the purchase of the vehicle directly with a lender (direct lending) or whether the dealer arranges financing for the purchaser (indirect lending). As a result, it can be difficult—and in some cases nearly impossible—to analyze differences between direct and indirect auto loans.
- Data Granularity, Consistency, and Quality. Complete and comprehensive auto lending analyses are nearly impossible because of variations within existing data, the lack of a centralized data source, and the cost and significant burden of combining data sets.
- Loan Performance Trends. There is a lack of reliable information on repossessions, including how many days past due a loan typically is before a vehicle is repossessed, how long the consumer has paid on the loan before a repossession, and post-repossession impacts for the borrower and lender. Stakeholders have pointed to a need for more consistent and granular data on delinquency and default trends, specifically the correlation between delinquency and geography, credit score, and income.
The CFPB states that it will continue to collect data and inform the public on its assessment of gaps in auto data. To learn more, please visit the full CFPB blog post on their auto finance data pilot.