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Auto Finance Receivables

Auto loans are the most common secured debt in the U.S. If a debtor defaults on an auto loan, the creditor can typically repossess the asset – the car – securing the loan. But if the asset is in a state of disrepair or otherwise diminished in value, the creditor cannot recoup the total balance owed by selling the car. So a deficiency balance is due from the debtor, with the balance becoming a receivable on the creditor’s books.


CFPB Orders Indirect Auto Finance Company to Pay $48.3M in Relief and Penalties for Illegal Debt Collection Tactics

The CFPB announced this afternoon an enforcement action against an indirect auto finance company and its auto title lending subsidiary for pressuring borrowers using illegal debt collection tactics. The following is the full text of the CFPB press release on the matter. If these allegations are true, this is your textbook example of “bad apple.”

cordray testimony 9.29.15

Congress Grills CFPB Director over New Rules, Bureau Methods

Consumer Financial Protection Bureau Director Richard Cordray was the sole witness at the House Committee on Financial Services Hearing yesterday, a hearing occasioned by the CFPB’s Semi-Annual Report. Throughout the long (nearly 4-hour) and often contentious hearing, Committee Members pushed Cordray on his agency’s rulemaking authority, the efficacy of statistical methods behind enforcement, the agency’s […]

Outsource In-House Signboards

The 986 Words That Have Guided First Party Outsourcing for 15 Years

For the past 15 years lawyers have artfully drafted agreements that address such things as whether the accounts being worked are “in default” and whether the employees of an agency working the business are “de facto” employees of the creditor. Often the contract would require that those same employees be segregated from the rest of the company and/or working in isolated space. Numerous other provisions in First Party service agreements all have their genesis in deMayo. Times have changed.


CFPB Takes Action Against Auto Finance Company for Debt Collection UDAAP Violation

Yesterday the Consumer Financial Protection Bureau (CFPB) announced it was taking action against a lender that focused on making automobile loans to servicemembers. The CFPB alleges that Security National Automotive Acceptance Company, LLC, an Ohio based auto finance company, regularly engaged in prohibited, aggressive debt collection tactics against servicemembers and used a combination of illegal […]


CFPB Finalizes Rule to Supervise Nonbank Auto Finance Companies

Yesterday the Consumer Financial Protection Bureau (CFPB) published a rule that will allow the agency to supervise larger nonbank auto finance companies for the first time. The CFPB already supervises auto financing at the largest banks and credit unions. Yesterday’s rule extends CFPB supervision to any nonbank auto finance company that makes, acquires, or refinances 10,000 or more loans or leases in a year.


Big Shifts in Debt by Age: A Very Literal Interpretation of Knowing Your Debtor

A recent credit report study from TransUnion found that the composition of loans that people typically carry has materially changed for both the youngest and oldest segments of the population during the last decade. Not only did economic forces prompt change, but general demographic shifts have changed the composition of outstanding credit among different age groups in the U.S.