CFPB Initiates Pilot Data Collection from Auto Lenders
The Consumer Financial Protection Bureau (CFPB), as part of the pilot program for collecting auto lending data, issued orders to nine large auto lenders to provide information about their auto lending portfolios. In addition, CFPB released a report examining trends in credit reporting of debt in collections from 2018 to 2022.
Data Collection Pilot for Auto Lending
The data collection pilot has been described as a market-monitoring activity under section 1022 of the Dodd-Frank Act. CFPB is seeking information from nine lenders that represent a cross-section of the auto finance market. The collected data will help build a quality dataset that is expected to provide insights into lending channels and loan performance and to inform potential future data collection efforts. CFPB intends to use this information for monitoring of risks to consumers in the offering or provision of consumer financial products or services, including developments in markets for such products or services. Based on the stakeholder feedback from discussions held in December 2022, CFPB identified following three areas where additional data visibility would be important:
- Lending Channel Differences—to analyze differences between direct and indirect auto loans. 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).
- 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—Stakeholders highlight that there’s 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 also expressed a desire to gain insight into the kinds of technology used during repossession, like GPS tracking and starter-interrupt devices.
Following the completion of data collection pilot, CFPB will continue to inform the public of the assessment of gaps in auto data, where this data provides new insight into the market, and the next steps in scoping and building an auto finance data set that will help better understand market trends.
Keywords: Americas, US, Banking, Lending, Credit Risk, Reporting, Dodd Frank Act, Data Collection, Third-Party Risk, CFPB
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
Advises U.S. and Canadian financial institutions on risk and finance integration, CCAR/DFAST stress testing, IFRS9 and CECL credit loss reserving, and credit risk practices.
Skilled market researcher; growth strategist; successful go-to-market campaign developer
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