Regulatory scrutiny of the auto lending space continued at a feverish pace this week.
The New York Department of Financial Services has issued subpoenas to the captive financing arms of Ford, Honda, Nissan and Volkswagen, along with banks Santander and TD Bank over allegations of discriminatory lending and other consumer abuses, according to a report published in the New York Post yesterday. The report cites an unnamed source familiar with the investigation.
U.S. regulators have been asking more auto lenders for detail on their lending practices for potential discriminatory practices, and both Toyota Motor Credit and America Honda Finance revealed last week that each had been served letters from the Consumer Financial Protection Bureau and the Department of Justice.
Companies like GM Financial and Santander Consumer USA Holdings Inc. also disclosed earlier this year that the Department of Justice was looking into their auto finance practices
Experts don’t see regulators backing off in their scrutiny of the auto lending apace. The CFPB revealed its long-awaited “Defining Larger Participants in Auto Finance” proposed rule this fall, which, when finalized, would bring the larger non-bank auto lenders under the supervision of the bureau.
The companies named in yesterday’s report have not yet issued comment.
