A few weeks ago, the Consumer Financial Protection Bureau announced it was developing a task force to study the existing legal and regulatory hurdles for consumers and financial services providers. The goal of the task force will be to report recommendations for improvements and streamlining to the agency’s director, Kathy Kraninger.
Open Lending is fair lending compliant, so you don’t have to worry about loans that come through our program. Check it out!
The deadline for applying to be on the task force was Oct. 25, so hopefully some credit union and community bank leaders got them in on time. Your voices matter!
On paper, the task force sounds like a great project that will benefit both consumers and lenders. Talk around the auto lending industry is that this should be a positive thing, because it could help to mitigate inconsistencies that have affected auto finance. For example, Michael Buckingham, senior director of automotive finance at J.D. Power and Associates, as recently reported in Automotive News, pointed out that the CFPB previously said in a 2015 that dealer discretion in setting the reserves resulted in unintended discrimination, so auto lenders started paying dealers a flat fee to avoid discrimination, but a series of consent orders with some large auto lenders were inconsistent. Knowing what to expect from any regulator is key to a smooth process and avoiding noncompliance claims. The devil, as they say, will be in the details, though.
The plan is for the CFPB task force to produce new research and legal analysis of US consumer financial laws, with an eye toward modernizing and aligning regulations, ways to improve consumer understanding of products, and potential conflicts or inconsistencies in existing regulations and guidance. “An objective and independent evaluation of our current regulatory framework to identify where there may be gaps or where regulation should be simplified or modernized is needed to help us more effectively carry out our mission of protecting consumers,” CFPB Director Kraninger said in announcing the task force. Names of the seven members of the task force have not been released yet.
And I would be remiss if I didn’t mention that the Open Lending program has always been and will always be fair lending compliant. Our improved underwriting rules identify all qualified applicants in the near and nonprime risk categories. At the same time, our enhanced underwriting and pricing engine allows the lender to approve and price individual loans to fit the portfolio design and profitability targets. Add in our advanced data analysis and your credit union can make better loans for members, including reduced down payment requirements and rates, in the lower credit tiers than they can get elsewhere.
Interested in learning how Open Lending can help you confidently say ‘yes’ to more loans? Contact us today!