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NAFCU, along with CUNA, CBA, the National Independent Automobile Dealers Association, and the American Financial Services Association, sent a letter to the CFPB regarding its probe into the auto lending market. In November, the bureau initiated efforts to “build a new data set that will allow for a more robust understanding of market trends” by collecting data from industry stakeholders and other agencies.

The effort to build this dataset is in response to trends uncovered when CFPB examined the substantial increase in cost of automobiles since the beginning of the pandemic, stating that auto loans were on track to outpace student loans by the first half of 2023.

In the letter, NAFCU and the trades express concern with the CFPB’s probe into the auto lending market, calling out the insufficient information and lack of authority with this request. They argue that “a Request for Information (RFI) would have offered a far superior framework to ask for and collect information about auto lending data.”

The trades also point out the bureau’s assumptions with their request, including using only automobile prices as the sole reason for the rapid changes within the auto market.

In addition, the groups call on the CFPB to utilize and update already available data on the auto lending market, including the bureau’s own auto loan data, which includes “origination activity, inquiry activity, borrower risk profiles, lending by neighborhood relative income level, and lending by borrower age.” 

NAFCU’s Annual Report on Credit Unions found that loan growth for credit unions surged in the second quarter of 2022 as a result of strong auto lending, but noted that will likely slow as a result of the rising interest rate environments.

Read the letter. NAFCU will continue to monitor the CFPB’s further actions regarding the auto lending market.