Commitment to Fair Lending Practices

AFSA Study Finds Significant Bias and High Error Rates in CFPB Proxy Methodology

By Karen Klugh | AFSA

A comprehensive study of more than 8.2 million auto financing contracts found that the disparity alleged by the Consumer Financial Protection Bureau (CFPB) between the amount of dealer reserve charged to minorities and non-minorities is not supported by data.

The study, Fair Lending: Implications for the Indirect Auto Finance Market, commissioned by the American Financial Services Association (AFSA), examined the proxy methodology used by the CFPB and found significant bias and high error rates.