The auto finance industry finds itself in the crosshairs of various state and federal agencies. In response, Buckley Sandler is able to apply its deep knowledge of consumer financial services law, as well as broad experience in litigation, enforcement, and transactional matters, to the needs of the auto finance industry.
We bring an experienced perspective, an understanding of how the auto finance industry works, and an appreciation for the issues that are most likely to be scrutinized by regulators. We help clients assess and mitigate risks in their existing operations, design new products, vendor management (including evaluating counterparties for prospective transactions), obtain necessary licenses, defend private litigation, resolve governmental enforcement actions, and negotiate and document critical third-party relationships as well as the purchase and sale of auto loans/receivables.
Our team advises on the key federal and state legal and regulatory compliance issues for auto finance, including the Consumer Financial Protection Bureau’s (CFPB) entry into the supervision of non-bank auto finance companies, fair lending, leasing, compliance with state installment sales acts and consumer credit codes, motor vehicle leasing, servicing and collections, repossession, and replevin. We counsel clients on issues pertaining to privacy, identity theft, and data security, and assist bank and non-bank finance companies with supervisory examinations and other regulatory matters.
We are also called upon regularly to conduct legal reviews and structure technology platforms for digital auto finance operations, including systems for the creation, storage, and transfer of “electronic chattel paper.” We participate in the development of the American National Standards Institute (ANSI) technical standard approved by ANSI’s Accredited Standards Committee, X9: ANS X9.103-2004 (Motor Vehicle Retail Sale and Lease Electronic Contracting) to provide guidance for the creation of electronic chattel paper in the automotive industry.
Noteworthy matters include:
- Represented American Honda Finance Corporation in its $24 million settlement with the Department of Justice (DOJ) and CFPB in a fair lending matter related to dealer participation practices
- Ongoing representation of multiple indirect auto finance companies in an investigation by the New York Department of Financial Services (NYDFS) into fair lending compliance
- Engaged in a 50-state lease review and re-write for a large national bank
- Completed a 50-state licensing survey applicable to indirect lending, leasing, securitization trusts, and insurance agencies for the U.S.-based captive finance subsidiary of a major foreign auto maker
- Represented an indirect auto finance company in a state attorney general investigation regarding the company's marketing of its inspection process and service warranties
- Conducted numerous compliance risk assessments related to originations, collections, credit reporting, and ancillary products
- Developed or enhanced fair lending compliance programs for more than a dozen banks and companies engaged in auto finance
Special Alert: District Court Confirms Telephonic Consent to Preauthorized ACH Debits Complies with ESIGN and EFTA
On February 17, a U.S. District Court in Nashville, TN found that a creditor complied with both the Electronic Signatures in Global and National Commerce Act  (“ESIGN”) and the Electronic Fund Transfer Act  and its implementing regulation, Regulation E  (collectively “EFTA”) when it...Articles
On June 2, 2016, the CFPB published its proposed rule (the “ Proposed Rule ”) addressing payday loans, vehicle title loans, and certain other installment loans (collectively “covered loans”). This alert summarizes the Proposed Rule and compares the Proposed Rule to the CFPB’s March 26, 2015 outline...Articles
The auto finance industry gained a new regulator in 2015 with the publication of the CFPB’s larger participant rule , which, for the first time, allows the Bureau to supervise larger non-bank auto finance companies. In this new compliance environment, larger participants would be prudent to...Articles
It’s no secret that the Consumer Financial Protection Bureau (CFPB) has its sights set on the U.S. automobile finance industry. As evidenced by recent CFPB Bulletins and consent orders with indirect auto finance sources, the CFPB’s current focus within the industry is largely on the practice of...Articles
On June 10, the CFPB issued its final rule to oversee “larger participant” nonbank auto finance companies. Although the CFPB received significant feedback during the comment period, the final rule is nearly identical to that proposed in September 2014. Under the final rule, the CFPB will have...Articles
Special Alert: CFPB Takes Enforcement Action Against "Buy-Here, Pay-Here" Auto Dealer for Alleged Unfair Collection and Credit Reporting Tactics
On November 19, the CFPB announced an enforcement action against a ‘buy-here, pay-here’ auto dealer alleging unfair debt collection practices and the furnishing of inaccurate information about customers to credit reporting agencies. ‘Buy-here, pay-here’ auto dealers typically do not assign their...Articles
As the subprime auto loan market has grown over the past few years, so too have the number of starter interrupters in use. According to a recent New York Times story, these devices have been installed in approximately 2 million vehicles and are used in about one-quarter of all subprime auto loans...Articles
Over the past few years, federal regulators — led by the Department of Justice — have sharply increased their focus on SCRA compliance. Although most recent headlines related to SCRA enforcement have arisen in the area of home mortgages, several major enforcement actions and multi-million dollar...Articles
Consumers have a larger platform to submit complaints against vehicle and consumer finance companies directly to regulators. The CFPB has set up an online database that allows the CFPB to receive consumers’ complaints against their lenders and take action or transfer those complaints to...Articles
The federal government is increasing scrutiny of financial services companies’ practices affecting active military members, veterans and their families. Earlier this year, the CFPB along with the FTC, the Department of Defense and the New York Attorney General announced the launch of the...Articles
Governor’s Proposed NY State Executive Budget Includes More Online Lending Supervision; State Assembly Budget “Rejects” Proposed Change
Article 7 of the New York State Constitution requires the Governor to submit an executive budget each year, which contains, among other things, recommendations as to proposed legislation. On February 16, New York Governor Andrew Cuomo released a proposed 2017-18 Executive Budget that includes a...InfoBytes
Buckley Sandler LLP hosted its eighth annual Fair Lending Today conference in Washington, DC on March 13-14, 2016. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The sessions were led by Buckley Sandler...In The News
John Redding Quoted in Auto Finance News Article, "Expect Changes in Distribution of Ally Settlement Funds"
John Redding was quoted in Diana Asatryn's Auto Finance News article, "Expect Changes in Distribution of Ally Settlement Funds," on January 25, 2016. The House Financial Services Committee released a report Wednesday criticizing the Consumer Financial Protection Bureau’s process for issuing...In The News
John Redding Quoted in Auto Finance News Article, "CFPB Finalizes 'Larger Participant' Rule With Only 'Minor Changes'"
John Redding was quoted in Larissa Padden's Auto Finance News article, "CFPB Finalizes 'Larger Participant' Rule With Only 'Minor Changes,'" on June 10, 2015. The proposed rule, which was announced in September 2014, was subject to a 60 day open comment period after it was published in the Federal...In The News
John Redding Quoted in Auto Finance News Article, Collection Vendors Pose a High Risk for Compliance, Expert Says
John Redding was quoted in Larissa Padden's Auto Finance News article, "Collection Vendors Pose a High Risk for Companies, Expert Says," on Monday, May 25, 2015. A company’s collection vendor can be one of the highest risks a vendor has — maybe the highest — said attorney John...In The News
Warren Traiger Quoted in Bloomberg BNA Article, "N.Y., Fearing Subprime Auto Loan Crisis, Asked to Give State Regulator Jurisdiction"
Warren Traiger was quoted in Gerald B. Silverman's Bloomberg BNA article, "N.Y., Fearing Subprime Auto Loan Crisis, Asked to Give State Regulator Jurisdiction" on Friday, April 24, 2015. The article covered remarks made by Traiger at an April 23, 2015 hearing of the New York State Senate Banks...In The News
John Redding Quoted in Auto Finance News Article, "Congress Introduces Legislation Aimed at Rescinding CFPB Dealer Guidelines"
John Redding was quoted in Larissa Padden’s Auto Finance News article, “Congress Introduces Legislation Aimed at Rescinding CFPB Dealer Guidelines,” on April 20, 2015. Representatives Frank Guinta (R-N.H.) and Ed Perlmutter (D-Colo.) introduced the Reforming CFPB Indirect Auto Financing Guidance...In The News
John Redding Quoted in Center for Auto Finance Excellence Article, "CFPB Monetary Resolutions on the Rise - But That's OK"
John Redding was quoted in Larissa Padden’s Center for Auto Finance Excellence article, “CFPB Monetary Resolutions on the Rise – But That’s OK,” on Wednesday, February 25, 2015. Last year, 53 auto lenders resolved 230 complaints with monetary resolutions, compared with 42 companies in 2013. However...In The News
John Redding Quoted in Auto Finance News Article, "Small Businesses Protest CFPB's 'Larger Participant' Rule
John Redding was quoted in Larissa Padden's Auto Finance News article, titled "Small Businesses Protest Protest CFPB's 'Larger Participant' Definition," on December 9, 2014. Attorney John Redding, Partner at Buckley Sandler LLP, drafted a letter to the CFPB, arguing that the financial impact and...In The News
John Redding Quoted in Auto Finance News Article, "CFPB 'Larger Participant' Rule's Comment Period Coming to a Close
John Redding was quoted in Larissa Padden's Auto Finance News article, titled "CFPB 'Larger Participant' Rule's Comment Period Coming to a Close," on December 8, 2014. The proposed rule currently proposes that companies which make, acquire, or refinance at least 10,000 or more loans or leases in a...In The News
BuckleySandler LLP hosted its eighth annual Fair Lending Today conference in Washington, DC on March 13-14, 2016. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The sessions were led by BuckleySandler attorneys...Press Releases
Buckley Sandler LLP hosted its annual Fair Lending Today conference in Washington, DC, March 15-16, 2015. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The roundtables and seminars were led by Buckley Sandler...Press Releases