Podcast: Regulators eye AI, aftermarket sales practices
Regulators are scrutinizing practices surrounding the use of artificial intelligence and machine learning as well as aftermarket product sales, prompting auto lenders to review processes for themselves and their dealer partners.
The Consumer Financial Protection Bureau this month published a letter to the U. .S. . Treasury making it clear that emerging AI-based technology isn’t exempt from long-standing consumer protection laws. . Lenders must test and monitor the use of new technology and tools and ensure that they convey accurate information to consumers.
At the same time, the CFPB’s funding is under scrutiny again, as new arguments question whether the bureau should receive money when the Federal Reserve isn’t profitable. . Under the Dodd-Frank Act, “the combined earnings of the Federal Reserve System” are supposed to fund the CFPB.
In powersports, inventory continues to be a challenge across every market segment, spawning elevated promotions to drive sales and operational changes to meet changing consumer demand.
In this episode of the “Weekly Wrap,” Auto Finance News Editor Amanda Harris and Associate Editors Ashley Savage and James Van Bramer discuss top trends in compliance, technology and powersports for the week ended Aug. 23.
Subscribe to “The Roadmap Podcast” on iTunes or Spotify or download the episode.
The Auto Finance Excellence Awards recognize leadership, performance and achievements by executives and companies in the industry. . Nominations for the 2024 AFE awards can be submitted here. . Registration is open for Auto Finance Summit 2024.
Hello everyone and welcome to the roadmap from auto Finance News. .
Since 1996, the nation’s leading newsletter on automotive lending and leasing, it is Monday, August 26th, and I’m Amanda Harris, joined by Ashley Savage and James Van Bramer. . This is our weekly wrap. . From what happened in auto finance for the week ending August 23rd, 2024, and Automotive News, the used EV price fell below 30,000 in June, driven largely by Tesla’s price cuts, spawning interest and used EV at retailers like CarMax, retail sales and use EV S jumped about 70% in the first half of the year, according to Cox Automotive. . And as evies become more affordable, demand is likely to pick up. . So we’ll of course keep following that also when Evie News, the Canadian government announced new tariffs on Chinese made electric vehicles, aluminum and steel, the policy includes a 100% levy on electric vehicles and 25% on steel and aluminum taking effect October 1st and will include certain hybrid passenger automobiles, trucks, buses and delivery vans. . And it adds to an existing 6.1% tariff that applies to Chinese EV and auto finance. . Capital One launched a physical card that allows sales personnel to share their profiles with consumers anywhere and give consumers access to inventory information and pre qualification. . The product name Muse is a result of Capital One $750,000,000 in investment in this technology stack, and efforts to improve lead generation and conversion for dealers Actually have it. . So you can see it. . So that is me, it’s. . AI-driven subprime auto lender Lendbuzz secured $400 million in forward flow funding from alternative asset manager Viola credit as the company continues to look for ways to diversify its funding strategy and to fund expected originations growth. . Lendbuzz’s originations year to date were 50% higher in the first half of the year compared to the same period in 2023. . We also had several updates and compliance last week. . The Consumer Financial Protection Bureau S funding is coming under scrutiny again as new arguments question whether the Bureau should receive funds when the Federal Reserve isn’t profitable. . So under the Dodd Frank Act, and CFPB is supposed to be funded from the combined earnings of the Federal Reserve System. . So the arguments that they shouldn’t have any funding right now are likely doing to continue cropping up and lawsuits. . So we’ll have to see how that plays out. . The Federal Trade Commission also was active this month, and James has the details there. . So James. . James Van Bramer 3:0 Thanks, Amanda. . As a as Amanda mentioned, yet PC has been active this month, so they took action against several dealership this month. . Alleging that the dealerships engaged in what they consider or what they call payment packing, this lawyers who practice in auto finance tell me is a notion that dealerships hard customers higher monthly payments. . By by adding ancillary items to the to the sales contract that the consumer may not have knowingly agreed to or that they were misled into believing was something that was required in both the cases. . One, including three dealerships under the Osprey Automotive Group 3 Texas dealerships under the Osprey Automotive Group and the other against Arizona based Coulter Motor Company, also alleged the dealerships payment practices also had disparate impacts on block and Latino consumers in particular. . For example, the complaint against the Texas dealerships said that black consumers were charged on average 298 more dollars for the same after market product add-ons, while Latino consumers were charged 214 more dollars than non Latino white consumers, according to the FTC complaint for lenders and finance company companies. . The major takeaway from the complaints was that regulators will likely not be deterred by whatever ends up happening to be cars. . Rule lawyers told me, which is still pending regulation. . Umm, this means that dealership partner. . This means that lenders dealership partners could be something to partnerships should be could be something that lenders should look at, especially because under the holder rule, lenders can be held liable for these payment practices even if they had no direct role in what occurred. . There’s much more to know about and learn about, so I direct you to the story. . If you want to hear and be more about it, I’ll be sure to continue monitoring what regulators are doing at in time. . I will be back to chat more about it as I learn more, but enough for me. . We also published our latest feature taking taking an in-depth look at powersport at the powersports market. . Gosh, that’s more details. . Ashley Savage 5:24 Yeah. . Thanks James. . As James mentioned, last week we ran an August feature on the current trends in the powersports market. . In short, the powersports market is likely to face a turbulent second half of the year as softening retail demand, affordability concerns and rising inventory levels create obstacles for lenders, dealers and manufacturers. . Excuse me and manufacturers to put it the way Tony Altieri with the national powersport auctions. . Did these headwinds have come together to conspire against the market? From what we’re hearing, inventory continues to be a top concern for just about every player in the powersports sector. . Whether you’re a lender, a dealer or an OEM, despite the challenges, powersport, lenders, dealers and manufacturers can help support all parties by knowing what their customers crave. . Acting on dealer and consumer feedback and improving existing financial services sales habits and production plans on the Windows side, the priority should and seems to be offering simple and fast finance solutions that help increase consumer confidence and dealer satisfaction. . On the dealer side, however, the priority should and also seems to be embracing discounts and new sales tactics. . Tactics to move inventory quickly, despite inevitable margin compression and on the OEM side, the willingness to offer incentives and rebates will play a huge role in how easily dealers can turn inventory in the back half of the year. . Last week, feature provides an in-depth look into each of these roles that play with specific examples, including updates on shipment plans from players, efficiency efforts from octane, and discounts offered by different dealers. . You missed it. . Not to worry, it’s available on our site and ready for read. . That’s all I’ve got on the powersports front. . So I’ll toss it back to Amanda.s Amanda Harris 7:00 Great. . Thank you, James and Ashley. . And that will do it for today’s episode. . So as a reminder, registration is open for the 2024 Auto Finance Summit and Powersports Finance Summit. . Returning to Vegas in October, we are also still accepting submissions for the auto Finance Excellence Awards and the Power Sports Achievement Awards. . So if there’s anyone in mind you would like to be recognized, please submit your nominations online to do so, and more information can be found on all of that at auto finance dot live. . Thank you for joining us on the roadmap. . Be sure to follow us on X and LinkedIn and we will see you online at autofinancenews.net and here next time.
Since 1996, the nation’s leading newsletter on automotive lending and leasing, it is Monday, August 26th, and I’m Amanda Harris, joined by Ashley Savage and James Van Bramer. . This is our weekly wrap. . From what happened in auto finance for the week ending August 23rd, 2024, and Automotive News, the used EV price fell below 30,000 in June, driven largely by Tesla’s price cuts, spawning interest and used EV at retailers like CarMax, retail sales and use EV S jumped about 70% in the first half of the year, according to Cox Automotive. . And as evies become more affordable, demand is likely to pick up. . So we’ll of course keep following that also when Evie News, the Canadian government announced new tariffs on Chinese made electric vehicles, aluminum and steel, the policy includes a 100% levy on electric vehicles and 25% on steel and aluminum taking effect October 1st and will include certain hybrid passenger automobiles, trucks, buses and delivery vans. . And it adds to an existing 6.1% tariff that applies to Chinese EV and auto finance. . Capital One launched a physical card that allows sales personnel to share their profiles with consumers anywhere and give consumers access to inventory information and pre qualification. . The product name Muse is a result of Capital One $750,000,000 in investment in this technology stack, and efforts to improve lead generation and conversion for dealers Actually have it. . So you can see it. . So that is me, it’s. . AI-driven subprime auto lender Lendbuzz secured $400 million in forward flow funding from alternative asset manager Viola credit as the company continues to look for ways to diversify its funding strategy and to fund expected originations growth. . Lendbuzz’s originations year to date were 50% higher in the first half of the year compared to the same period in 2023. . We also had several updates and compliance last week. . The Consumer Financial Protection Bureau S funding is coming under scrutiny again as new arguments question whether the Bureau should receive funds when the Federal Reserve isn’t profitable. . So under the Dodd Frank Act, and CFPB is supposed to be funded from the combined earnings of the Federal Reserve System. . So the arguments that they shouldn’t have any funding right now are likely doing to continue cropping up and lawsuits. . So we’ll have to see how that plays out. . The Federal Trade Commission also was active this month, and James has the details there. . So James. . James Van Bramer 3:0 Thanks, Amanda. . As a as Amanda mentioned, yet PC has been active this month, so they took action against several dealership this month. . Alleging that the dealerships engaged in what they consider or what they call payment packing, this lawyers who practice in auto finance tell me is a notion that dealerships hard customers higher monthly payments. . By by adding ancillary items to the to the sales contract that the consumer may not have knowingly agreed to or that they were misled into believing was something that was required in both the cases. . One, including three dealerships under the Osprey Automotive Group 3 Texas dealerships under the Osprey Automotive Group and the other against Arizona based Coulter Motor Company, also alleged the dealerships payment practices also had disparate impacts on block and Latino consumers in particular. . For example, the complaint against the Texas dealerships said that black consumers were charged on average 298 more dollars for the same after market product add-ons, while Latino consumers were charged 214 more dollars than non Latino white consumers, according to the FTC complaint for lenders and finance company companies. . The major takeaway from the complaints was that regulators will likely not be deterred by whatever ends up happening to be cars. . Rule lawyers told me, which is still pending regulation. . Umm, this means that dealership partner. . This means that lenders dealership partners could be something to partnerships should be could be something that lenders should look at, especially because under the holder rule, lenders can be held liable for these payment practices even if they had no direct role in what occurred. . There’s much more to know about and learn about, so I direct you to the story. . If you want to hear and be more about it, I’ll be sure to continue monitoring what regulators are doing at in time. . I will be back to chat more about it as I learn more, but enough for me. . We also published our latest feature taking taking an in-depth look at powersport at the powersports market. . Gosh, that’s more details. . Ashley Savage 5:24 Yeah. . Thanks James. . As James mentioned, last week we ran an August feature on the current trends in the powersports market. . In short, the powersports market is likely to face a turbulent second half of the year as softening retail demand, affordability concerns and rising inventory levels create obstacles for lenders, dealers and manufacturers. . Excuse me and manufacturers to put it the way Tony Altieri with the national powersport auctions. . Did these headwinds have come together to conspire against the market? From what we’re hearing, inventory continues to be a top concern for just about every player in the powersports sector. . Whether you’re a lender, a dealer or an OEM, despite the challenges, powersport, lenders, dealers and manufacturers can help support all parties by knowing what their customers crave. . Acting on dealer and consumer feedback and improving existing financial services sales habits and production plans on the Windows side, the priority should and seems to be offering simple and fast finance solutions that help increase consumer confidence and dealer satisfaction. . On the dealer side, however, the priority should and also seems to be embracing discounts and new sales tactics. . Tactics to move inventory quickly, despite inevitable margin compression and on the OEM side, the willingness to offer incentives and rebates will play a huge role in how easily dealers can turn inventory in the back half of the year. . Last week, feature provides an in-depth look into each of these roles that play with specific examples, including updates on shipment plans from players, efficiency efforts from octane, and discounts offered by different dealers. . You missed it. . Not to worry, it’s available on our site and ready for read. . That’s all I’ve got on the powersports front. . So I’ll toss it back to Amanda.s Amanda Harris 7:00 Great. . Thank you, James and Ashley. . And that will do it for today’s episode. . So as a reminder, registration is open for the 2024 Auto Finance Summit and Powersports Finance Summit. . Returning to Vegas in October, we are also still accepting submissions for the auto Finance Excellence Awards and the Power Sports Achievement Awards. . So if there’s anyone in mind you would like to be recognized, please submit your nominations online to do so, and more information can be found on all of that at auto finance dot live. . Thank you for joining us on the roadmap. . Be sure to follow us on X and LinkedIn and we will see you online at autofinancenews.net and here next time.
