Subprime car loans are pretty much terrible. They’re exploitative of lower-income borrowers, financially risky for lenders, and frankly the only thing that keeps them from being every inch as disastrous for everyone as subprime mortgages — so far — is that their dollar values are lower.
If you can’t get through to Honda Financial Services, the automaker’s U.S. financing arm, don’t be surprised: they’re currently dealing with a double-debiting fiasco affecting customers who submit payments online. Some customers report that their accounts have overdrafted due to the unexpected double payments. [More]
Under the Equal Credit Opportunity Act, creditors are prohibited from discriminating against loan applicants based on race or national origin. But that was a rule Toyota’s financing unit allegedly violated, resulting in thousands of African-American, Asian and Pacific Islander borrowers paying higher interest rates than their white counterparts. Now, in an effort to resolve charges filed by the Consumer Financial Protection Bureau, Toyota Motor Credit Corporation must pay $21.9 million to wronged consumers. [More]
Federal regulators continued their crackdown on not-so-upfront “buy-here, pay-here” auto dealers today, ordering a Colorado-based dealer to pay nearly $1 million in restitution and fines for operating an abusive financing scheme. [More]
Regulators Take Action Against Fifth Third Bank For Auto-Lending Discrimination, Illegal Credit Card Practices
Federal regulators dished out a double dose of enforcement today by taking action against Fifth Third Bank for allegedly charging higher interest rates to minority borrowers for car loans and deceptively marketing credit card add-on products to bank customers. [More]
Now that the Great Recession has gone from “is it really over?” to “remember when?” more Americans are buying cars, pushing auto loan debt beyond the $1 trillion mark for the first time in U.S. history. [More]
Each year, Santander writes or services billions of dollars worth of auto loans and leases in the U.S., making it one of the nation’s largest providers of automobile financing. Yesterday, the company revealed that the Consumer Financial Protection Bureau is looking into whether Santander violated federal fair-lending laws. [More]
Under the Equal Credit Opportunity Act, creditors are prohibited from discriminating against loan applicants based on race or national origin. But that was a rule Honda’s financing unit allegedly violated, resulting in thousands of African-American, Hispanic, and Asian and Pacific Islander borrowers paying higher interest rates than white borrowers for their auto loans. Now, as part of a settlement with federal regulators to resolve allegations that the company allowed discriminatory loan pricing, the company must provide $24 million in restitution to borrowers. [More]
While mobile banking is no doubt convenient for customers – and banks – there’s a significant downside to the fact that more and more financial institutions are using the technology: an increased risk that your personal information will fall in the hands of a cyber criminal. [More]
While some folks get their car loans from the bank or credit union, many Americans finance their vehicle purchases through non-bank entities, including auto dealers. But until now, the federal Consumer Financial Protection Bureau only had regulatory authority on car loans issued by financial institutions. A new rule from the CFPB will soon give the agency oversight of the nation’s largest non-bank auto finance operations. [More]
Purchasing a new or used vehicle can represent quite a commitment for consumers, especially as the length of an average vehicle loan continue to get longer, now reaching all-time highs. [More]
The lending arms for national car dealers, such as Ford and Toyota, may soon have to answer to federal regulators. The Consumer Financial Protection Bureau released a proposed rule that would give the agency oversight of automakers’ financing units in a step to prevent discrimination and other harmful practices – marking a move that was applauded by several consumer advocacy groups. [More]
Banks Can’t Get Away With Horrible Mortgage Practices Anymore, So Now They’re Doing It With Car Loans
Subprime loans: they aren’t just for mortgages anymore. The next big bubble of ill-advised loans to borrowers who can’t pay is coming due. This time, it’s used car dealers reaping the interest and repossessing the cars.
For many of us, things have improved since 2010, when the country finally began clawing its way out of the crater that resulted from the collapse of the housing market. So why are some consumers doing a worse job of making car loan payments than they were during the recession? [More]
Earlier today, the Justice Dept. and the Consumer Financial Protection Bureau announced the largest auto loan discrimination settlement in U.S. history with the news that Ally Bank has agreed to pay $98 million, including $80 million in refunds to settle allegations that it has been charging higher interest rates to minority borrowers of car loans. [More]
Most people know that having a less-than-perfect credit score makes it more difficult to get a loan. And for those who can manage to be approved for a loan or new credit card, it also means they will end up with higher payments.
While a lot of focus has been put on scammers who trick homeowners into costly schemes by promising to reduce their mortgage payments, people are also being taken in by bogus businesses that claim to help with auto loans.
Have you ever seen a car dealership ad that promises to pay off the loan balance of your trade-in, even if you owe more than the value of the trade-in? Well, the Federal Trade Commission has stopped a handful of dealers from continuing to deceive buyers with this too-good-to-be-true offer.