NADA, NAMAD and AIADA Issue Statement on CFPB Proposal to Oversee Nonbank Auto Finance Companies
McLEAN, Va. (Sept. 17, 2014) - In response to the Consumer Financial Protection Bureau's proposal to oversee larger nonbank auto finance companies, the National Automobile Dealers Association (NADA), the National Association of Minority Automobile Dealers (NAMAD) and the American International Automobile Dealers Association (AIADA) issued the following statement:
"As stated on numerous occasions, NADA, NAMAD and AIADA strongly oppose discrimination in any form and fully support the efforts of the CFPB, the Department of Justice, the Federal Trade Commission and other federal agencies to eliminate it from the marketplace.
"However, the CFPB has again failed to fully disclose its methodology for measuring for the presence of disparate impact. There are legitimate, market-based reasons for disparities in interest rates - from monthly budget constraints, to the presence of more competitive offers, to inventory reduction considerations - all of which are nondiscriminatory and all of which can be documented in the transaction. A better solution would be for lenders to adopt a robust retail compliance program that documents the basis of the pricing decision to effectively reduce the risk of discrimination in the purchasing process. The Department of Justice has created such a risk mitigation model, and we encourage the Bureau not to overlook this common sense approach to addressing fair credit risks in the auto financing market.
"With respect to the proxy methodology report released by the CFPB, many of the questions that Congress and others have asked remain unanswered. We look forward to rigorous peer review to ensure that the tools the Bureau is using to address fair credit concerns may actually accomplish its goals."