CFPB Announces Repeat Offender, Auto Lending Initiatives

Despite questions over its future, the CFPB pressed ahead in announcing both a new repeat offender and auto lending initiative. Learn why.

David Baumann


Nov 21



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David Baumann

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David Baumann

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Bureau shows no signs of letting up as case concerning its future is appealed to Supreme Court.

Even as its future funding remains unclear, the CFPB has announced two new initiatives—one to increase its focus on repeat offenders and the other to gather information about the auto lending industry.

A federal appeals court has ruled that the CFPB’s funding is unconstitutional since it comes directly from the Federal Reserve and not through the appropriations process. The Biden Administration has appealed that case to the U.S. Supreme Court.

While the high court decides whether to accept the case, agency officials have made it clear that they will not let up on scrutiny of the financial services industry.

Repeat Offenders

In its most recent supervisory highlights, released last week, CFPB officials announced the formation of a Repeat Offender Unit.

“The Repeat Offender Unit will focus on ways to enhance the detection of repeat offenses, develop a process for rapid review and response designed to address the root cause of violations, and recommend corrective actions designed to stop recidivist behavior,” the agency said, in announcing the effort. “This will include closer scrutiny of corporate compliance with orders to ensure that requirements are being met and any issues are addressed in a timely manner.”

The office’s duties will include identifying the source of recurring violations and recommending solutions that hold entities accountable for failing to consistently comply with federal financial law. The office also will design a model for monitoring financial services providers that reduces the occurrences of repeat offenders.

Auto Lending

In announcing the auto lending effort, CFPB officials said that while a great deal is known about the student loan and mortgage industries, far less is known about the auto lending market. “Without this holistic view, market participants are unable to identify emerging risks and opportunities as they occur,” the agency stated. “This could lead to negative consequences for consumers, lenders, and investors.”

The need for such information recently has become more urgent, according to the bureau.

“Over the past two years, car prices have risen significantly, leading to larger loan amounts and higher monthly payments,” the agency said, in asking for public comment about the industry. “These loan size increases are beginning to have an impact on consumers and households.”

The agency explained it intends to build a new data set that will allow for a better understanding of market trends. That effort might include “collecting retrospective data from a sample of lenders that represent a cross-section of the auto lending market,” CFPB officials added.

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