The Consumer Financial Protection Bureau certainly had a busy year, given all the consent orders issued and fines leveled against auto lenders by the regulatory body in 2015.
While CFPB complaints overall increased significantly throughout the year, according to an Auto Finance News analysis, captives like American Honda Finance, Toyota Financial Services, and Nissan Motor Acceptance found themselves under the regulatory agency’s microscope this year.
Only a month into 2016, and the Bureau has received harsh criticism from the House Financial Services Committee, in a report released on Wednesday. In the report the committee called into question the process the CFPB used for issuing payouts to affected borrowers in Ally Financial Inc.’s disparate impact case.
Whether you face CFPB scrutiny or not, it pays to be prepared, attorney John Redding, partner at Buckley Sandler LLP told Auto Finance News. To help focus your preparation process, here are the Top 3 things that will be on the CFPB’s mind this year, as told by Redding.
“It’s all about establishing staff training and constant monitoring of your debt collections processes,” Redding said. The Bureau will keep up the series of enforcement actions against collections malpractices, attorney said.
Insuring that consumer info is being reported accurately, to avoid furnishing credit data to credit bureaus is essential, Redding said. “You also need to insure that complaints and disputes about credit reporting are handled in a good manner, and that corrections are made,” he said. “The right thing to do, when disputes are still being resolved, is to either suspend credit reporting or place under constant monitoring.”
Increased Focus on E-Payments
“Electronic payments can make it easier on the compliance side, assuming the systems are set up correctly,” Redding said. “There are things like authorization requirements, and disclosure requirements, so you need to make sure your system has appropriate disclosures in place.” As more and more lenders adapt e-contracting and e-payments, those requirements would change accordingly, Redding cautioned.