The Consumer Financial Protection Bureau is seeking public comment on raising the threshold for classifying companies as “larger participants” in the auto financing market.
The CFPB issued an Advance Notice of Proposed Rulemaking (ANPR) Aug. 8, opening the comment period. NIADA will offer its views on the proposal.
The move would drastically reduce the number of nonbank entities in the auto financing space subject to CFPB supervision. Under the current Automobile Financing Larger Participant Rule, finalized in 2015, nonbank auto finance companies are deemed larger participants and are subject to CFPB oversight if they annually originate at least 10,000 auto loans.
The ANPR outlines three potential new thresholds, with the most sweeping proposal suggesting a jump to 1.05 million originations. That proposal would reduce the number of supervised entities from 63 to just five. Those remaining five would still represent 42 percent of market activity.
Currently, the 63 supervised entities account for approximately 94 percent of the market.
This proposal is one of four under consideration across different sectors as part of a broader deregulatory agenda gaining momentum under acting CFPB Director Russell Vought. The effort reflects both a philosophical shift toward reduced federal oversight and a practical response to budgetary constraints.
The recently enacted One Big Beautiful Bill Act, signed into law on July 4, slashes the CFPB’s operating budget by nearly 50 percent. With fewer resources and a presumed reduced workforce, narrowing the scope of regulatory supervision appears designed to realign the agency’s responsibilities with its diminished capacity.
