Industry Stays Silent On CFPB’s ‘Larger Participant Rule’
Halfway through the 60-day comment period, no comments have been received on the Consumer Financial Protection Bureau’s ‘Defining Larger Participants of the Automobile Financing Market’ proposed rule. Tomorrow will mark one month since the proposed rule was published in the Federal Register. A representative from the CFPB today confirmed with Auto Finance News that no comments had yet been entered.
The rule, which proposes that larger nonbank auto finance companies that make, acquire, or refinance at least 10,000 or more loans or leases in a year be brought under the watchful eye of the CFPB, was published into the Register on October 8, kicking off a 60-day comment period, open to the public.
“Those comments can then impact or effect what the final rule looks like,” attorney John Redding, partner at Buckley Sandler LLP, told Auto Finance News after the proposed rule was announced in September. “So, for instance, they may make an adjustment to what is included or excluded from the definition of ‘automobile.’ They may make a change as to the threshold: is it 10,000 accounts or is it 20,000 accounts, or is it 50,000?”
At the October Auto Finance Summit in Las Vegas, attorney Michael Benoit of Hudson Cook, LLP urged the industry to submit comments, saying industry views help the CFPB learn. But four weeks after the rule was published, industry officials have yet to weigh in.
Attorney Michael Thurman, founder of Thurman Legal, speculated that this may be an indication the industry will not put up too much of a fight in the wake of the CFPB’s rationale for which they made their larger participant designations.
“The smaller participants who don’t foresee that they’ll be included obviously don’t have anything to say,” Thurman said. “The larger participants generally, and they don’t even know for sure who they are, unless they were going to make a larger case that the method of determining a larger participant should be different, may just be accepting the fact that the basis the CFPB has selected is not unreasonable and they may not be challenging it.”
However, Thurman said, almost any rule and announcement draws comments from at least consumer groups, making the silence somewhat surprising.
The comment period for the proposed rule closes December 8th, and attorney Chris Willis, partner at Ballard Spahr LLP, told AFN that while there hasn’t been heavy commentary on some of the bureau’s previous proposed larger participant rules, industry officials may just be waiting to comment as we get closer to the deadline.
“There can be a time delay, because it doesn’t happen instantaneously, but the agency is not supposed to weed through them and say, ‘Oh I like this comment I’ll put it on the internet,’” Willis said. “I didn’t expect this one to generate a lot of comment, but I would have expected some, just a small number. Maybe everyone is waiting for the last day to comment.”
