CFPB Seeks Approval for New Auto Finance Data Collection

The CFPB recently published a notice in the Federal Register indicating that it is seeking approval from the Office of Management and Budget (OMB) for the collection of additional auto finance data pursuant to its authority under the Dodd-Frank Act .

In February 2023, the CFPB announced that it had issued market monitoring orders to nine large auto lenders requesting information about their auto lending portfolios.  The CFPB published a sample order on its website.

The requests within the order asked for detailed loan level data regarding originations and servicing from January 1, 2018 through December 31, 2022.  For example, the originations section asked for 23 different categories of data (plus sub-categories) regarding vehicle pricing and loan terms and another 23 categories of data regarding the dealer, lender, and borrower(s).  The servicing section included, among other requests, a request for 28 different data categories regarding repossessions and voluntary surrenders.

In the notice of its new request to OMB, the CFPB refers to the February 2023 orders as the “initial Auto Finance Data Pilot” project  (Pilot).  It states that the data from the Pilot both confirmed the benefit of additional data collection to fully carry out the CFPB’s mission, to fulfill the CFPB’s mandate to monitor the auto finance market for risks to consumers, and to inform the way the CFPB would propose to collect data in the future.  

The CFPB is now proposing to collect data in the following two processes:

• An annual collection of a set of data from lenders that originate greater than 20,000 auto loans in the previous calendar year.  The data collection would mirror the data collected in the Pilot.
  
  
• An annual collection of a set of data from lenders that originate greater than 500 auto loans and fewer than 20,000 auto loans in the previous calendar year.  The data collected would be information on the number of vehicles repossessed and the number of loan modifications. 

As we noted when the CFPB issued the initial market monitoring orders last year, the CFPB has been focused on rising auto prices and a corresponding increase in loan amounts, monthly payment amounts, and delinquencies, especially in the subprime and deep subprime market segments. 

These types of data collections typically result in the issuance of a report that is a precursor to new guidance or rulemaking.  It is likely that the CFPB will receive objections to the new data collection from industry.