The American Financial Services Association (AFSA) has raised concerns with the Federal Trade Commission (FTC) regarding recent policy shifts in the interpretation of the Holder Rule. This rule traditionally limits the liability of servicers of financed purchase contracts to the amount agreed upon in the finance contract. However, AFSA claims that the FTC's new stance extends this liability to include attorney’s fees, potentially making it unlimited.
AFSA communicated these concerns through a letter responding to an FTC request for feedback on regulations affecting competition. The association argues that this shift could disrupt pricing and credit availability, negatively impacting both industry and consumers.
According to AFSA, "the consumer finance industry understands the effect of Holder Rule liability on business and incorporates those considerations into pricing decisions." They assert that expanding liability beyond historical limits exceeds FTC authority and advocate for a reversal of this policy change.
"AFSA encourages the FTC to reverse course," emphasizing that maintaining traditional interpretations is crucial for stability in consumer finance.