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ARTICLE · 14 AUGUST 2023

CFPB Reports Troubling Trends In Auto Loan Servicing

Goodwin Procter LLP
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On July 26, 2023, the Consumer Financial Protection Bureau (CFPB) issued a new Supervisory Highlights report (Report) that sheds light on the CFPB's observations and findings of unfair...

United StatesConsumer Protection
Robin L. Muir
Robin L. Muir

On July 26, 2023, the Consumer Financial Protection Bureau (CFPB) issued a new Supervisory Highlights report (Report) that sheds light on the CFPB's observations and findings of unfair, deceptive, and abusive practices in auto loan servicing, among other consumer financial products. The Report - which covers CFPB supervisory examinations from July 2022 to March 2023 - "furthers [the CFPB's] efforts to highlight conduct that violates federal law, including the prohibition on abusive practices in consumer financial services," said CFPB Director Rohit Chopra.

The Report details the CFPB's findings of unfair and abusive practices in auto loan servicing related to servicers' charging and collection of interest on loan balances that servicers knew to be artificially and fraudulently inflated. Examiners observed that car loan balances would be artificially inflated as a result of car dealers fraudulently representing on financing documents that the vehicle had options and

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