Cutting Corners In A Competitive Auto Market

The Consumer Financial Protection Bureau ("CFPB") announced in a press release issued in conjunction with the release of its latest Supervisory Highlights that it is concerned that financial institutions and other companies involved with auto financing might be incented to step up repossession of cars belonging to borrowers in default. While repossession is permissible, it is usually a last-ditch solution to a chronically behind borrower. And, any time physical property is taken from a consumer, additional precautions must be taken. However, the CFPB has observed several situations in its examinations where companies jump to repossess vehicles, without paying close enough attention to their own records. Specifically, the CFPB has identified servicers who repossess cars wrongfully, typically when the borrower is still behind on payments, but has made payments sufficient to stave off repossession. Sometimes that situation occurs because of a lack of communication between