CFPB releases second auto finance data pilot report focusing on vehicle repossessions

The Consumer Financial Protection Bureau (CFPB) recently released the second report in its 2023 Auto Finance Data Pilot series. The report offers an analysis of vehicle repossession data, highlighting trends from 2018 to 2023. This follows the initial report, which focused on negative equity in vehicle finance transactions.

The American Financial Services Association (AFSA) has praised the CFPB for providing a report that presents objective insights into market conditions concerning repossession. "With large disruptions in the vehicle finance markets due to the pandemic and voluntary steps by industry to modify finance contracts for consumers, the past several years have been extraordinary," noted AFSA. They also emphasized that some findings merely show correlations without implying causation.

While the CFPB addresses repossession as potentially harmful to consumers, it is essential to consider another perspective. Repossession serves as a legal remedy for default under state laws and is not obscure or hidden from consumers. It is clearly outlined in standard vehicle finance agreements as a consequence of loan default.

Vehicle finance companies strive to adhere strictly to legal procedures when managing delinquent accounts, including those leading to repossession. These companies maintain comprehensive policies with guidance from legal and compliance experts. Although seen as a last resort, repossession can sometimes be unavoidable. AFSA members emphasize handling these situations with care and ensuring full compliance with all relevant laws and regulations.

AFSA further stresses that their members ensure all repossessions are conducted professionally and peacefully by contractors who understand the importance of complying fully with legal requirements.

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