The Consumer Financial Protection Bureau (CFPB) issued a compliance bulletin and additional articles concerning the state of the auto market with inflation as well as the risky practices involved in the repossession of automobiles that could lead to unfair or abusive acts or practices (UDAAPs).
The CFPB recently released a compliance bulletin to “thwart illegal repossessions in the heated auto market.” The CFPB is issuing guidance regarding the risky practices involved in the repossession of automobiles because actions taken could be UDAAPs. The CFPB lays out its expectations for entities to prevent UDAAPs and to ensure market participants are following federal consumer financial laws. The bulletin outlines examples of conduct constituting “wrongful repossession” that have been found and may be found to be an unfair or deceptive practice.
The CFPB also lists its expectations by listing actions that entities should consider taking to avoid UDAAPs, such as reviewing consumer complaints regarding repossession and performing regular reviews of service providers, including repossession vendors.
The CFPB is working to ensure a fair and transparent auto lending market in the following ways:
- Ensuring affordable credit for auto loans
- Monitoring practices in auto servicing and collecting
- Fostering competition among subprime lenders
For more information and to review the CFPB’s full compliance bulletin, click this link.