Commitment to Fair Lending Practices

Trade groups urge CFPB to respond to AFSA vehicle sales finance study

By Barbara Mishkin | CFPB Monitor

Feb. 19, 2015

Five prominent industry trade groups sent a letter to the CFPB yesterday seeking “to engage the CFPB in a constructive dialogue” on the study of indirect auto financing commissioned by the American Financial Services Association.  The study, which was conducted by Charles River Associates, found that the CFPB’s proxy methodology for measuring disparities in auto dealer reserve was “conceptually flawed in its application and subject to significant bias and estimation error.”  Among the study’s other key findings was that the CFPB’s preferred alternative dealer compensation methods, namely the use of a fixed fee, fixed percentage of the amount financed, or hybrid of the two, may increase the cost of credit for consumers.
Read the full post at the source: http://www.cfpbmonitor.com/2015/02/19/trade-groups-urge-cfpb-to-respond-to-afsa-vehicle-sales-finance-study/