Auto Finance

The auto finance industry finds itself in the crosshairs of various state and federal agencies. In response, Buckley is able to apply its deep knowledge of consumer financial services law, as well as broad experience in litigation, enforcement, and transactional matters, to the needs of the auto finance industry.

We bring an experienced perspective, an understanding of how the auto finance industry works, and an appreciation for the issues that are most likely to be scrutinized by regulators. We help clients assess and mitigate risks in their existing operations, design new products, vendor management (including evaluating counterparties for prospective transactions), obtain necessary licenses, defend private litigation, resolve governmental enforcement actions, and negotiate and document critical third-party relationships as well as the purchase and sale of auto loans/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 (CFPB) entry into the supervision of nonbank auto finance companies, fair lending, leasing, compliance with state installment sales acts and consumer credit codes, motor vehicle leasing, 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.

We are also called upon regularly to conduct legal reviews and structure technology platforms for digital auto finance operations, including systems for the creation, storage, and transfer of “electronic chattel paper.” We participate in the development of the American National Standards Institute (ANSI) technical standard approved by ANSI’s Accredited Standards Committee, X9: ANS X9.103-2004 (Motor Vehicle Retail Sale and Lease Electronic Contracting) to provide guidance for the creation of electronic chattel paper in the automotive industry.

Noteworthy matters include:

• Represented American Honda Finance Corporation in its $24 million settlement with the Department of Justice (DOJ) and CFPB in a fair lending matter related to dealer participation practices
   
• Ongoing representation of multiple indirect auto finance companies in an investigation by the New York Department of Financial Services (NYDFS) into fair lending compliance
   
• Engaged in a 50-state lease review and re-write for a large national bank
   
• 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
   
• 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
   
• Developed or enhanced fair lending compliance programs for more than a dozen banks and companies engaged in auto finance