The American Financial Services Association (AFSA) has responded to the Consumer Financial Protection Bureau's (CFPB) Auto Finance Special Edition of Supervisory Highlights. The association expressed concerns that the document lacks sufficient detail for the auto-finance industry to adjust practices in accordance with the guidance provided. AFSA suggests that a more effective approach would be through the rulemaking process.
In response to Section 2.2.1 on wrongful repossession, AFSA agrees with the need for servicers to prevent erroneous repossessions but highlights challenges due to insufficient guidance from the CFPB on acceptable policies and procedures.
Regarding Section 2.2.2 on repossessing vehicles without a recorded lien, AFSA requests clarification from the CFPB, arguing that creditor rights are established by contracts rather than solely by recorded liens.
Section 2.3.2 addresses delays in providing titles, where AFSA acknowledges the importance of timely title release but notes that delays may occur due to necessary fraud prevention measures.
In Section 2.4 concerning voluntary products, AFSA seeks clarification on whether "originator" refers to finance sources or dealerships, emphasizing that dealerships typically sell ancillary products.
AFSA also comments on Section 2.4.6 about refunds for voluntary products, stating that dealers should be responsible for refunds as they profit from selling these products and state laws often govern refund processes.
Section 2.4.7 discusses refund calculations for voluntary products, where AFSA asks the CFPB to reconsider its stance on pro rata calculation dates being tied to repossession events due to potential complexities and variations across states.
Finally, in Section 2.4.9 concerning notifications related to total loss events covered by GAP products, AFSA points out instances where servicers continued collecting payments despite knowing consumers had GAP waivers covering outstanding balances.