Specifically, the CFPB’s agenda is to “understand the complete lifecycle of an auto loan — before the loan is made, all the way through when the loan is paid off or goes into repossession,” said Calvin Hagins, deputy assistant director for originations in the office of supervision policy at the CFPB.
“[In 2018,] we will be looking at institutions based on risk, and trying to do exams where we conducted a servicing review already — whether it was this year or will be in 2018, or what we’ve done in origination exams — so that we have the whole picture together,” Hagins told attendees at the 2017 Auto Finance Summit last week.
In particular, compliance management systems (CMS) will remain a top focus next year. The CFPB expects institutions to have a process in place for their CMS, regardless of whether or not the bureau “shows up,” Hagins said.
“The degree of CMS will vary based on risk in the institution as well as the complexity of operations,” he said. “… The objective here is to not have a one-size program for every institution.”
Additionally, the CFPB will continue to use information or issues gathered from other regulators and consumer complaints to use as “red flags” and “indicators for things we should consider,” Hagins said.
In the CFPB’s annual report which covers its fair lending activities in 2017 and priority focus areas in 2017, mortgage and student loan servicing are listed as a top focus. Scrutiny on mortgage lending could filter to auto in many cases, Hagins said at AFS.
“We use our experiences on current exams in originations and servicing to update our exam manual, but we also use experiences from other product lines,” he said. “One [product line] that is most akin to auto is mortgages. Most consumers have mortgages and they have to be serviced, and there’s a possibility that some of the same practices could happen in auto on the originations and servicing side. … That’s how we approach our work in originations and servicing.”
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