9 finance companies asked to share info for CFPB auto finance data pilot
The next step in building what the Consumer Financial Protection Bureau is calling its auto finance data pilot put the onus on nine finance companies.
According to a bureau blog post pushed online Thursday, the CFPB said it issued orders to nine “large” auto finance companies to provide information about their portfolios. The blog post did not specify which nine credit providers received these orders.
A sample letter articulating the demand can be viewed here.
In the blog post authored by Chris Kukla, Richard Landau and Ashwin Vasan, they said, “Congress has tasked us with ensuring that markets for consumer financial products and services are fair, transparent, and competitive. We routinely ask lenders in different sectors of the market to provide information and data that helps us monitor risks to consumers and to publish aggregated findings that are in the public interest.
“These nine lenders represent a cross-section of the auto finance market,” Kukla, Landau and Vasan continued. “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.
“We take protecting consumer privacy very seriously and are required by statute to take steps to protect the personal information of consumers. We have taken care to ensure that no directly identifiable information — like name, address, or Social Security Number — is collected as part of this pilot,” they went on to say.
The CFPB recapped that it orchestrated an auto finance data stakeholder event in December. The bureau said the event included market participants, fellow regulatory agencies, other Federal Reserve officials, market analysts, and consumer researchers and advocates to gather input on the current data landscape.
The regulator noted he discussions identified three areas where most participants stated that additional data visibility would be important:
—Lending channel differences
—Data granularity, consistency, and quality
—Performance trends
Another area the CFPB said it is seeking information focuses on technology associated with vehicle repossessions such as GPS tracking and starter-interrupt devices.
“Little is known about how often these technologies are used (which raise other privacy, security, and liability concerns), their effectiveness, and their impact on repossession timing,” Kukla, Landau and Vasan wrote in the blog post.
“These areas are helping guide our pilot efforts,” they continued. “A common thread from the stakeholder event, the docket comments we received, and other stakeholder discussions is that a fuller understanding of the underlying trends of the market is important for consumers, market participants, and regulators alike.
“The current data landscape is fragmented and requires significant time and effort to piece together. Most of the participants in our stakeholder events stated that access to high-quality, consistent, and regularly published auto lending data would provide greater transparency and foster a better functioning market,” they went on to say.