CFPB director Richard Cordray used a soldier’s subprime auto loan complaint and the subsequent June 2013 settlement as a call to arms for the National Association of Treasurers in Washington, D.C. Cordray urged the group to work with the government agency and “make the consumer financial markets work again ― not just for Wall Street investors but for everyday Americans.”
Specifically, Cordray instructed the group that when its members receive complaints about finance companies, they should inform consumers that their complaints are being sent to CFPB. “Give us a chance to use our authority and know-how to help the people you serve,” Cordray told the group.
Cordray then cited the case of a fellow named Harry from Massachusetts who had contacted CFPB through its “Tell Your Story” program. Harry told CFPB about his son Ari, a 21-year-old infantry soldier, who Cordray said was hurt by a subprime auto loan.
The outcome of the case led to U.S. Bank and one of its nonbank partner companies, Dealers’ Financial Services, to pay out $6.5 million to service members for failing to properly disclose all the fees charged to participants in the companies’ Military Installment Loans and Educational Services (MILES) auto loans program, and for misrepresenting the true cost and coverage of add-on products financed along with the auto loans.
When they make it to difficult for banks to lend to Sub-Prime customers. I guess they will all have to walk to work or stay home and live off the government.
I think his comments should put all dealers and finance companies on alert that “for misrepresenting the true cost and coverage of add-on products financed along with the auto loans”. Will cause Disparate Impact and or Disparate Treatment.
For sometime I have pointed out that dealers will be required to disclose all the cost and services that are included in the auto loan or lease package for all the financing sources a dealer is associated with at one time. This disclosure will have to be side by side with all the financing sources, offer to finance or their negative response, Adverse Action Notice.
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