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Financial Services Law Insights and Observations

CFPB seeks to enhance public data on auto lending

Federal Issues CFPB Auto Finance Consumer Finance

Federal Issues

On November 17, the CFPB announced it is seeking public comment on its proposal to develop a new data set to monitor the auto loan market. According to the Bureau, more than 100 million Americans have an auto loan, and currently there is approximately $1.5 trillion in outstanding auto loan debt, making it the third-largest consumer credit category. The Bureau explained that financial markets and policymakers have access to mortgage data that has given insight into patterns in lending and risk. But, despite its size, there is less known about the auto lending market. Over the past two years, car prices have risen significantly, which has resulted in higher loan amounts and monthly payments. The Bureau noted that these loan size increases are “beginning to have an impact on consumers and households. Recent data show an increase in auto loan delinquencies, particularly for low-income consumers and those with subprime credit scores.” According to the Bureau, the available data permits market participants to identify and measure certain trends but is insufficiently granular to fully explore the cause of those trends. The Bureau also noted that many auto loans are made to consumers with subprime or deep subprime credit scores from lenders that do not furnish data on those loans to credit reporting agencies. Specifically, for its request, the Bureau is “seeking to build a new data set that will allow for a more robust understanding of market trends,” which may include, among other things, “collecting retrospective data from a sample of lenders that represent a cross-section of the auto lending market.” Comments are due by December 19.

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