Listen: Weekly Wrap on credit disputes and FinovateFall

Last week, FinovateFall in New York City was in full swing, bringing together fintechs and financial institutions for three days of technology demos, panel discussions and fireside chats. Data authentication, consumer-facing messaging applications and artificial intelligence (AI) were front and center as fintechs and banks look to prioritize servicing operations through partnerships and incorporate more data into credit decisioning. U.S. Bank is eyeing growth with multilingual offerings for its AI-based Smart Assistant while Truist separately last week launched its own AI-enhanced virtual assistant , Truist Assist. In other news, the Consumer Financial Protection Bureau and the Federal Trade Commission have teamed up to challenge a lower court’s ruling that is poised to have far-ranging implications in lenders’ ability to determine whether to investigate trade-line disputes from credit reporting agencies. In this episode of the Weekly Wrap, Deputy Editor Amanda Harris and Editor Joey Pizzolato discuss the top stories for the week ending Sept. 16, and what is in store for the week ahead. Subscribe to The Roadmap Podcast on iTunes , Spotify , or download the episode. Editor’s note: This episode is sponsored by Inovatec . Auto Finance Summit, the premier industry event for auto lending and leasing , returns October 26-28 at the Wynn Las Vegas. To learn more about the 2022 event and register, visit www.AutoFinanceSummit.com . Video Transcript: Editor’s note: This transcript has been generated by software and is being presented as is. Some transcription errors may remain. Joey Pizzolato 00:02 Hello everyone and welcome to the roadmap from auto finance news since 1996, the nation's leading newsletter on automotive lending and leasing. It's Monday, September 19. I’m Joey Pizzolato, joined by Amanda Harris. This is our weekly wrap on what happened in auto finance for the week ending September 16 2022. This episode is sponsored by Inovatec. In general economic news, the inflation rate or consumer price index top economists forecasts in August writing rising 0.1% From July and 8.3% from a year earlier. solidifying expectations have another 75 basis point. benchmark interest rate increase later this month when the Federal Open Market Committee meets tomorrow and Wednesday. Core CPI, which was volatile food and energy components increased 0.6% From July and 6.3% from a year ago, According to the Labor Department. All measures increase increased above forecast. With shelter, food and medical posting the largest gains. Vehicle values dropped 4% sequentially but remain 8.4% higher than they were a year ago. According to Mannheim. In Europe, new car sales posted their first game in 13 months in August, registration Rose 3.4% to nearly 749,000 vehicles last month. According to the European Automobile Manufacturers Association. Mercedes Benz was among the best with a 16% jump from a year ago. Still, record inflation in Europe covered with rising energy prices as a result of the Ukraine Russia war will likely quell buyer sentiment in the coming months in auto finance and in financial services. The wider financial services Excuse me finovatefall in New York City was in full swing last week bringing together fintechs and financial institutions for three days of technology demos, panel discussions and fireside chats. Data authentication consumer facing less messaging applications and artificial intelligence were unsurprisingly front and center as fintechs and banks look to prioritize servicing operate operations through partnerships and incorporate more data into credit decision making. And to score for example, send an estimated that incorporating alternative data into consumers credit score increased nonprime borrower score by an average of 20 points. US Bank said it is eyeing growth and multilingual offerings for its AI based smart assistant. While true is separately last week launched its own AI enhanced virtual assistant called truest assist. Notable startups from the conference that auto lenders should take a look at include tax status Tesslar software, interface AI, Nuance Communications, Agent IQ, n contracts, leap experts and quick fi to name a few. Our other top story last week involved surprise the Consumer Financial Protection Bureau and the Federal Trade Commission. And then Harris has the details.Amanda Harris 03:03 Yes, surprise, surprise, another compliance. Yeah, so the agencies have been quite active lately. So this latest story that I've been talking about, basically, the Consumer Financial Protection Bureau and the Federal Trade Commission are essentially challenging a lower court's ruling that they believe could allow lenders to determine whether to investigate disputes they received from credit reporting agencies, which would obviously be a pretty big change from the norm. So I'm going to get into that a little bit. So the CFPB, and the FTC filed an amicus brief in support of the court Tuesday with the US Court of Appeals for the Third Circuit, and this was related to a case of Ingram versus experience. So the case essentially boil down to the courts interpretation of the Fair Credit Reporting Act in the definition of an indirect dispute, which are the typically those coming from a credit reporting agency rather than those coming from the consumer directly to the furnisher. So typically, consumers can dispute inaccuracies on their credit report either by filing a dispute directly with the lender or indirectly challenging a trade line through a credit reporting agency. So typically, credit reporting agencies are the ones that determine whether a dispute has merit before they send the dispute to the furnisher to investigate. And this particular case was spurred after consumer reported that a delinquent Comcast account on his credit file was opened fraudulently. Comcast said the consumer did not submit enough proof of the fraud so the company could not remove the account. After that the credit card credit reporting company sent the dispute the dispute with the credit card company sent that dispute to the debt collector. And that company also declined to investigate dispute the dispute prompting the consumer to sue Comcast, along with the credit reporting agencies and the debt collector involved in the case. Thus essentials. The lower court ultimately ruled that the debt collector did not have to investigate the dispute because furnishers are only required to invest surrogate was determined to be a bonafide indirect dispute. The ruling would allow lenders to basically deem disputes from credit reporting agencies frivolous and to decline to investigate if they feel that that's the route they need to go. That's directly in conflict with how the CFPB and the FTC interpret the Fair Credit Reporting Act. So the regulatory agencies are essentially saying that the lower court was wrong in its interpretation of the FCRA. And in its ruling, and if the decision were to stand as is it could create an exception to the FCRA that can obviously have far reaching implications and change how lenders can basically investigate disputes that they would allow, be allowed to define what's what Spotify was frivolous, the client investigate in direct conflict, what happens now. So it's gonna likely be months before the appeal is moved forward, obviously, the regulatory agency that made their stance no with that amicus brief in support of appealing that decision, but for right now, lender should definitely keep a close eye on this case, because depending on the outcome, and obviously does have some pretty big implications and potentially positives for lenders, as far as operations slew and cash flow goes. If the decision we're gonna stand, but it just kind of depends on on how the appeal process works. But we know where the regulatory agencies stand, and we know how they're interpreting the rules. So take that as you as you will. So that's kind of what's going on there. Joey Pizzolato 06:25 Right. And I would expect this to sort of continue to go up the chain. Because as we everyone knows, the FCRA is on top of mind for the CFPB as they are you know, thinking about their the way that they're approaching their new policies and enforcement examinations in those things. Well, that about does it for today's episode. Thanks for joining us on the roadmap. Follow us on Twitter and LinkedIn and please join us later in October for the powersports finance Summit and the auto finance summit in Las Vegas. You can learn more and register online at power sports finance.com and auto finance summit.com. We will see you online at auto finance news.net and here next time

Listen: Weekly Wrap on credit disputes and FinovateFall

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