CFPB Mulls Collecting Auto Loan Data From Credit Unions

A CFPB proposal to provide a database of auto lending statistics has drawn criticism from Republicans, credit unions, banks and the U.S. Chamber of Commerce, while a coalition of consumer groups have encouraged the agency to collect even more data.

The CFPB has proposed collecting an extensive list of data each year from credit unions that made 20,000 or more loans in the prior year.

In addition, the CFPB is calling for more limited annual reports for credit unions that originated 500 to 19,999 auto loans in the prior year. The CFPB said it just wants them to report the number of vehicles repossessed and the number of loan modifications.

America’s Credit Unions joined a March 25 comment with the U.S. Chamber of Commerce, the American Bankers Association and other banking trade groups.

The 14-page letter argued the CFPB lacks the authority to order the data to be provided and that collecting the data would be a burden.

The CFPB estimated the rule would affect 4,000 lenders.

The NCUA counted 4,702 credit unions at the end of last year, while the FDIC reported on 4,587 banks. Most of them make auto loans. Plus there are non-bank auto lenders.

So how many credit unions would be affected?

Well, that gets to the issue. The NCUA doesn’t collect data on the number or value of auto loan originations. Nor does it collect other data the CFPB is seeking. America’s Credit Unions said it could not provide an estimate.

The lenders’ letter said the CFPB plans to collect loan-level detail on more than 120 data points from those with 20,000 or more loan originations, including:

• The total price of the vehicle;
• All fees;
• Any voluntary products;
• All the loan terms;
• The dealer reserve amount;
• Both the loan-to-value and payment-to-income ratios;
• The brand of vehicle;
• Whether the vehicle was new or used;
• Information on the dealer;
• Information on the borrower such as credit score and income;
• The military status of the borrower;
• Information on whether the loan was paid off;
• Information about repossessions; and
• Consumer complaints.

A letter from 18 Republican House members backed the credit unions and other business groups, saying the proposal is not needed and would be a burden on the businesses.

“By expanding data collection without a clear explanation of how it serves to protect consumers, the CFPB is embarking on an unauthorized fishing expedition rather than fulfilling its mandate to carry out the purposes and objectives of the Federal consumer financial laws,” the Republicans wrote.

The consumer groups said they want the CFPB to collect more data and collect it quarterly.

The seven consumer groups signing the 11-page letter March 25 include the National Consumer Law Center, Consumer Reports and the Center for Responsible Lending, the policy arm of the Durham, N.C., nonprofit group operating two credit unions: Self-Help Credit Union ($1.8 billion in assets, 89,110 members as of Dec. 31) and Self-Help Federal Credit Union ($2.1 billion, 100,997 members).

“Auto credit is currently the largest source of non-housing consumer debt in the United States,” they wrote. “Yet publicly available data is minimal and often excludes important portions of the marketplace and important details of the transactions — details that reveal the performance of the credit market in allowing consumers to affordably and safely buy a car, as well as risks to consumers.”

The consumer groups said they want the CFPB to also:

• Collect information that reflects the broad array of credit transactions and creditors, including Buy-Here-Pay-Here, smaller subprime and regional financing entities;
• Ensure that the data collected is publicly available and usable in as granular a condition as possible, and is updated on a regular basis;
• Collect data about lease transactions that allows the analysis of the consumer market risks created by the leasing market; and
• Consider ways to collect data about consumer demographics, including race, ethnicity, age, gender and other characteristics.

The CFPB is now reviewing the comments. If it chooses to go forward with the project, it will publish a notice allowing 30 days to comment to the Office of Management and Budget about the proposed collection of auto loan data before the CFPB submits the collection proposal to the Office of Management and Budget for approval.