Auto Finance
Practice Overview
Buckley applies its deep knowledge of auto finance and general consumer financial services law, as well as broad experience in litigation, enforcement, and transactional matters, to help clients address the complex issues the industry faces amid tight scrutiny from federal and state regulators.
We know the auto finance industry well, and are experienced in the issues that attract the greatest regulatory attention. We help clients assess and mitigate risks in their operations, design new products, implement vendor management tools and programs (including evaluating counterparties for prospective transactions), obtain licenses, defend private litigation, resolve governmental investigations and enforcement actions, and negotiate and document critical third-party relationships. We also routinely provide counsel on the purchase and sale of auto loans and receivables.
Our team advises on the key federal and state legal and regulatory compliance issues for auto finance, including the Consumer Financial Protection Bureau’s supervision of nonbank auto finance companies, fair lending, leasing, compliance with state installment sales acts and consumer credit codes, motor vehicle leasing, credit reporting, servicing and collections, repossession, and replevin. We counsel clients on issues pertaining to privacy, identity theft, and data security, and assist bank and nonbank finance companies with supervisory examinations and other regulatory matters.
Our lawyers also regularly conduct legal reviews and structure technology platforms for digital auto finance operations, including underwriting systems and those used for the creation, storage, and transfer of "electronic chattel paper."
Noteworthy matters include:
- Represent auto dealer financing companies in fair lending matters related to dealer participation practices brought by the Department of Justice and CFPB
- Ongoing representation of multiple indirect auto finance companies in investigations by the New York Department of Financial Services (NYDFS) into fair lending compliance
- Ongoing representation of multiple auto finance companies and banks in escalated supervisory actions and investigations by the CFPB into credit reporting issues
- Completed an end-to-end review and enhancement of a national bank’s repossession-related policies, procedures, and practices
- Ongoing representation of multiple nonbank auto finance companies in investigations by the DOJ into Servicemembers Civil Relief Act policies, procedures, and practices
- Engaged in numerous multistate lease and retail installment reviews and re-writes for both bank and nonbank industry participants
- Completed a 50-state licensing survey applicable to indirect lending, leasing, securitization trusts, and insurance agencies for the U.S.-based captive finance subsidiary of a major foreign auto maker
- Completed a 50-state survey covering requirements related to the servicing of ancillary products
- Represented an indirect auto finance company in a state attorney general investigation regarding the company's marketing of its inspection process and service warranties
- Conducted numerous compliance risk assessments related to originations, collections, credit reporting, and ancillary products for both bank and nonbanks
- Assisted fintech companies in developing and launching new auto finance products
- Developed or enhanced fair lending compliance programs for more than a dozen banks and nonbank companies engaged in auto finance
Articles
Special Alert: California Assembly to introduce legislation for Covid-19-related relief for mortgage loans, vehicle-secured credit, PACE financing, and deferred deposit transactions
We understand that the California State Assembly will shortly propose amendments to Assembly Bill No. 2501 to create the “COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020.” Note: The proposed legislation was available on California’s legislative service website shortly after publication...
Special Alerts"Dorian update: How state laws protect servicemembers" by Jeffrey P. Naimon, Sasha Leonhardt, and Jessica M. Shannon (Law360)
Hurricane Dorian devastated the Bahamas and southeastern United States in late August and early September, and the governors of Florida, Georgia, North Carolina, South Carolina and Puerto Rico authorized the activation of state National Guard forces for response efforts. In addition, the Rhode...
Articles"Equipment finance: Understanding licensing obligations" by Kathryn L. Ryan (Equipment Leasing & Finance Magazine)
Licensing Considerations, Generally The applicability of state licensing laws may depend on multiple factors, including transaction structures, business entity types and whether the activities are appropriately classified as “commercial” or another type of non-consumer transaction. Although the...
Articles"Hurricane Florence: How state laws protect service members" by Jeffrey P. Naimon, Sasha Leonhardt, and Jessica M. Shannon (Law360)
As the southeastern United States braces for Hurricane Florence, the governors of North Carolina, South Carolina and Virginia have authorized their state National Guard for response efforts, and neighboring governors in Maryland and West Virginia have placed their National Guard members on notice...
ArticlesMarshall T. Bell and Megan E. Whitehill Authored a Law360 Article, "Ability-To-Repay Enforcement Comes To Auto Finance"
In recent years, regulators and enforcement agencies have eagerly exercised their authority to prosecute what they perceive as unfair or deceptive acts and practices (UDAPs). Unfortunately for the auto finance industry, these regulators and agencies show no sign of tapping the brakes on such...
ArticlesSpecial Alert: District Court Confirms Telephonic Consent to Preauthorized ACH Debits Complies with ESIGN and EFTA
On February 17, a U.S. District Court in Nashville, TN found that a creditor complied with both the Electronic Signatures in Global and National Commerce Act [1] (“ESIGN”) and the Electronic Fund Transfer Act [2] and its implementing regulation, Regulation E [3] (collectively “EFTA”) when it...
ArticlesSpecial Alert: CFPB's Proposed Rule Regarding Payday, Title, and Certain Other Installment Loans
On June 2, 2016, the CFPB published its proposed rule (the “ Proposed Rule ”) addressing payday loans, vehicle title loans, and certain other installment loans (collectively “covered loans”). This alert summarizes the Proposed Rule and compares the Proposed Rule to the CFPB’s March 26, 2015 outline...
ArticlesYear in Review: Auto Finance and the CFPB in 2015
The auto finance industry gained a new regulator in 2015 with the publication of the CFPB’s larger participant rule , which, for the first time, allows the Bureau to supervise larger non-bank auto finance companies. In this new compliance environment, larger participants would be prudent to...
ArticlesAncillary Products Are Anything but Ancillary for the CFPB
It’s no secret that the Consumer Financial Protection Bureau (CFPB) has its sights set on the U.S. automobile finance industry. As evidenced by recent CFPB Bulletins and consent orders with indirect auto finance sources, the CFPB’s current focus within the industry is largely on the practice of...
ArticlesSpecial Alert: CFPB Finalizes Rule to Oversee Nonbank Auto Lenders
On June 10, the CFPB issued its final rule to oversee “larger participant” nonbank auto finance companies. Although the CFPB received significant feedback during the comment period, the final rule is nearly identical to that proposed in September 2014. Under the final rule, the CFPB will have...
ArticlesSpecial Alert: CFPB Takes Enforcement Action Against "Buy-Here, Pay-Here" Auto Dealer for Alleged Unfair Collection and Credit Reporting Tactics
On November 19, the CFPB announced an enforcement action against a ‘buy-here, pay-here’ auto dealer alleging unfair debt collection practices and the furnishing of inaccurate information about customers to credit reporting agencies. ‘Buy-here, pay-here’ auto dealers typically do not assign their...
ArticlesStarter Interrupters Expose Lenders to SCRA Risks
As the subprime auto loan market has grown over the past few years, so too have the number of starter interrupters in use. According to a recent New York Times story, these devices have been installed in approximately 2 million vehicles and are used in about one-quarter of all subprime auto loans...
ArticlesHighway to the Danger Zone: Automotive Lending and the Servicemembers Civil Relief Act
Over the past few years, federal regulators — led by the Department of Justice — have sharply increased their focus on SCRA compliance. Although most recent headlines related to SCRA enforcement have arisen in the area of home mortgages, several major enforcement actions and multi-million dollar...
ArticlesSpotlight on Auto Finance, Part 2: New Database to Combat Fraud Against Military and Veterans
The federal government is increasing scrutiny of financial services companies’ practices affecting active military members, veterans and their families. Earlier this year, the CFPB along with the FTC, the Department of Defense and the New York Attorney General announced the launch of the...
Articles
News & Blogs
Mississippi AG reaches $3.7 million settlement with auto finance company
On July 21, the Mississippi attorney general announced a settlement with an auto finance company to resolve alleged violations of the Mississippi Consumer Protection Act. The AG claimed the auto finance company, among other things, allegedly placed consumers into loans with a high probability of...
InfoBytesCFPB reports credit applications have mostly rebounded to pre-pandemic levels
On July 27, the CFPB published a special issue brief finding that consumer applications for auto loans, new mortgages, and revolving credit cards had, for the most part, returned to pre-pandemic levels by May 2021. The brief compares the number of applications made in these categories before the...
InfoBytesCFPB examines reported assistance trends on consumers’ credit records
On July 13, the CFPB released findings regarding trends in reported assistance on consumers’ credit records. The post—the second in a series documenting trends in consumer credit outcomes during the Covid-19 pandemic (the first covered by InfoBytes here )—examines consumer month-to-month...
InfoBytesNYDFS announces fair lending settlements with indirect auto lenders
On June 29, NYDFS announced settlements with two New York banks to resolve allegations that the banks violated New York Executive Law § 296-a while engaged in indirect automobile lending. NYDFS alleged that the banks’ practices resulted in members of protected classes paying higher interest rates...
InfoBytesCFPB issues summer supervisory highlights
On June 29, the CFPB released its summer 2021 Supervisory Highlights , which details its supervisory and enforcement actions in the areas of auto loan servicing, consumer reporting, debt collection, deposits, fair lending, mortgage origination and servicing, payday lending, private education loan...
InfoBytesCFPB reports low delinquency rates despite Covid-19
On June 16, the CFPB released findings on delinquency trends for auto loans, student loans, mortgages, and credit cards. The post—the first in a series that will document consumer credit trend outcomes during the Covid-19 pandemic—examines how trends have evolved since June 2020. As previously...
InfoBytesDistrict Court says disputed tradeline is not misleading
On June 8, the U.S. District Court for the Middle District of Alabama granted a defendant auto finance company’s motion for judgment on the pleadings in an action concerning alleged violations of the FCRA. The plaintiff filed an action against the defendants (an auto finance company and a financial...
InfoBytesBank reaches auto loan settlement
On June 8, the U.S. District Court for the Central District of California preliminarily approved a class action settlement , resolving allegations that a national bank failed to properly refund payments made pursuant to guaranteed asset protection waiver (GAP Waiver) agreements entered into in...
InfoBytesDistrict Court: No private right of action under PA’s Motor Vehicle Sales Finance Act
On May 20, the U.S. District Court for the Eastern District of Pennsylvania partially granted defendants’ motion for summary judgment in an action concerning alleged violations of the Pennsylvania Motor Vehicle Sales Finance Act (MVSFA) and the FCRA. The plaintiff filed an action against the...
InfoBytesCFPB settles with auto lender over unfair LDW practices
On May 21, the CFPB announced a settlement with a California-based auto-loan lender to resolve allegations that the company engaged in unfair practices with respect to its Loss Damage Waiver (LDW) product, in violation of the Consumer Financial Protection Act. The CFPB alleged that the company...
InfoBytes
Press Releases & Announcements
Buckley Sandler launches APPROVED licensing service
WASHINGTON, D.C. (March 7, 2018) – Buckley Sandler LLP today formally announced the launch of APPROVED , a new approach to licensing for financial services companies. Buckley Sandler is building upon years of financial services experience and licensing know-how to offer APPROVED, a technology-...
Press ReleasesBuckleySandler Hosts Eighth Annual Fair Lending Today Conference
BuckleySandler LLP hosted its eighth annual Fair Lending Today conference in Washington, DC on March 13-14, 2016. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The sessions were led by BuckleySandler attorneys...
Press ReleasesBuckley Sandler Hosts Annual Fair Lending Today Conference
Buckley Sandler LLP hosted its annual Fair Lending Today conference in Washington, DC, March 15-16, 2015. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The roundtables and seminars were led by Buckley Sandler...
Press Releases
Our Auto Finance Team
Partners
FYI
Special Alert: California Assembly to introduce legislation for Covid-19-related relief for mortgage loans, vehicle-secured credit, PACE financing, and deferred deposit transactions
Recent Blog Posts
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July 28, 2021
Mississippi AG reaches $3.7 million settlement with auto finance company
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July 27, 2021
CFPB reports credit applications have mostly rebounded to pre-pandemic levels
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July 13, 2021
CFPB examines reported assistance trends on consumers’ credit records
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July 1, 2021
NYDFS announces fair lending settlements with indirect auto lenders
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July 1, 2021
CFPB issues summer supervisory highlights