Toyota Financial Services has a good working relationship with the Consumer Financial Protection Bureau and has been providing the agency and the Department of Justice with all requested information related to its lending practices, spokesman Justin Leach told Auto Finance News. The CFPB and DOJ are probing TFS and several other large captives for possible lending discrimination.
Leach said that CFPB had indicated “some time ago” that it wanted to better understand dealer participation. “So when they began to inquire officially with captive finance companies, it was certainly no surprise,” he wrote in an email.
Leach pointed out that TFS does not track the race or ethnicity of its customers or credit applicants, and these are never factors in any credit or pricing decision. “As the best-selling automotive brand among diverse communities, with a No. 1 share of market among African-Americans, Asian-Americans, and Hispanics, we take seriously our commitment to supporting diversity and inclusion through every aspect of our business,” Leach said.
The best time to get in was the middle of 2008, if you had any money to lend. That was maybe the best, ever, or at least the last 25 years. The second best time to get in was 2009. The third best time was 2010. And now is still pretty good. Associated is shutting down their whole consumer loan piece (not just auto), as it is not their core business. Perhaps this goes to show that if you’re going to get into auto finance, you have to be really serious about it, or you can get burned either from a risk standpoint or operationally.
Not Trying to be a Smart A__, the question comes to my mind how do you know thqt your company is “As the best-selling automotive brand among diverse communities, with a No. 1 share of market among African-Americans, Asian-Americans, and Hispanics.”
Under disparate impact if your able to make that statemnet you might be guilty of UDAAP’s violations. Atleast that is the way I see the CFPB is operating.
Good question Mr. Fowler. The distinction we are referring to is the Toyota automotive brand. Toyota is the best-selling automotive brand among African-Americans, Asian-American and Hispanics. We know that the Toyota brand is #1 because of independent research done by Polk, a third-party automotive data and research provider. Polk’s research reflects the customers’ choices in vehicle, not lender. Again, Toyota Financial Services, as a LENDER, does not track the race or ethnicity of its customers or credit applicants, and these are never factors in any credit or pricing decision.
Good reply, however with the new thinking and aspirations of the CFPB this could still be considered a possible UDAAP violation, regardless of who did the testing.
My point is UDAAP’s violations is a broad highway and whenever you address race issues in any manner you face the possibility of the CFPB looking at you, especially if they can link this line of thinking with your company to more than one incident.
It’s a crock but a dangerous one in which everyone and every company needs to adjust their thinking on this subject. Not trying to be critical just a thought I’m sharing in the hopes it helps wake up our profession.