Report: CFPB urging Fifth Third Bank to modify dealer mark-up
Another online report has surfaced indicating the Consumer Financial Protection Bureau is urging a large auto finance company to modify its practices regarding dealer participation as part of negotiations to settle alleged discriminatory practices.
The Wall Street Journal cited what the report described as people familiar with the matter who indicated the CFPB is asking Fifth Third Bank to reduce the amount of dealer mark-up it allows in exchange for a reduced monetary settlement with the regulator.
These sources didn’t know if Fifth Third Bank would accept the offer or what the settlement amount might be, according to the report.
Should the commercial bank make these changes, it could impact a large amount of dealerships. Experian Automotive’s latest data put Fifth Third Bank at No. 15 in terms of national auto finance market share, holding 1.15 percent. Fifth Third Bank also ranked among Experian’s top 20 market holders after the first quarter for new-model financing (1.07 percent) and used-vehicle financing (0.95 percent).
SubPrime Auto Finance News reached out to Fifth Third Bank on Thursday to obtain reaction to the report, but a message had not yet been returned.
This development arrives less than a month after American Honda Finance Corp. agreed to reduce dealer participation as part of its settlement with the CFPB.
Another commercial bank adjusted its strategy, too, but it wasn’t involved in an enforcement action. Earlier this summer, BB&T Dealer Services switched to flat fees.