WASHINGTON–Nine large auto lenders have been issued orders by the CFPB to provide information about their auto lending portfolios as part of a pilot program for collecting auto lending data.
The CFPB said the nine lenders, which it did not name, represent a cross-section of the auto finance market.
“The data collected from their responses to these orders will help us build a quality data set that provides insights into lending channels, loan performance, and inform potential future data collection efforts,” the Bureau stated.
The Bureau described the pilot as a market-monitoring activity as provided in section 1022 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
The Sample Order
A sample order included with the information provided by the lenders “is intended to be used for monitoring for risks to consumers in the offering or provision of consumer financial products or services, including developments in markets for such products or services.”
The Bureau added, however, that it “reserves the right to use and share internally the information for any purpose permitted by law.”
In its announcement the Bureau said it had earlier announced its intention to build a new auto lending data set last November, held discussions with stakeholders, and gathered public input into the auto lending areas “most in need of greater transparency.” The Bureau further noted that an event it hosted earlier identified three areas where “additional data visibility” would be important: lending channel differences; data granularity, consistency, and quality; and loan performance trends.
Additional Detail
The Bureau described the three areas in additional detail, including:
- Lending Channel Differences. The Bureau said that currently data is generally not broken down by whether the consumer secures financing for the purchase of the vehicle directly with a lender (direct lending) or whether the dealer arranges financing for the purchaser (indirect lending). “As a result, it can be difficult – and in some cases nearly impossible – to analyze differences between direct and indirect auto loans,” the CFPB said.
- Data Granularity, Consistency, and Quality. According to the CFPB, complete and comprehensive auto lending analyses are nearly impossible because of variations within existing data, the lack of a centralized data source, and the cost and significant burden of combining data sets. The CFPB said the variety of lender types in the auto finance market can lead to data gaps.
- Loan Performance Trends. “There’s a lack of reliable information on repossessions, including how many days past due a loan typically is before a vehicle is repossessed, how long the consumer has paid on the loan before a repossession, and post-repossession impacts for the borrower and lender,” the CFPB said. “Stakeholders have pointed to a need for more consistent and granular data on delinquency and default trends, specifically the correlation between delinquency and geography, credit score, and income.”
No Identifiable Data
In making its announcement the CFPB said it has “taken care to ensure that no directly identifiable information – like name, address, or social security number – is collected as part of this pilot.”
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