On September 24, NIADA submitted comments to the CFPB on its proposed rule, adopting a standard definition of “risks to consumers” under Section 1024(a)(1)(C) of the Consumer Financial Protection Act of 2010.
This rarely used provision allows the CFPB to supervise nonbank financial entities if it determines they are engaging in conduct that poses risks to consumers in connection with consumer financial products or services. The proposed rule aims to bring greater clarity and consistency to how the CFPB exercises this authority.
NIADA’s comments highlight the already robust oversight framework governing independent dealers at both the federal and state levels. The association urged the CFPB to consider this existing oversight when defining what constitutes a consumer risk
Specifically, NIADA made two key recommendations:
1. Explicit Exemptions: The final rule should exempt entities like independent automobile dealers that are already subject to comprehensive and overlapping federal and state oversight.
2. Complaint Standards: The CFPB should limit consideration of consumer complaints to those alleging concrete, actionable harm, not merely dissatisfaction with a customer experience or speculative claims lacking evidence of misconduct.
Looking Ahead
NIADA remains optimistic that its input will help shape CFPB rulemaking in a way that promotes fairness, reflects the unique structure of the independent automobile dealer marketplace, and aligns with the CFPB’s current supervisory priorities, which have shifted away from nonbank financial institutions since the start of the Trump administration.
NIADA will continue to identify and advocate for commonsense regulatory relief at the federal level. At the same time, NIADA reminds dealers that, in light of these and other recent announcements from the CFPB, they should remain vigilant in their compliance efforts. State regulatory and law enforcement officials across the country are widely expected to exercise their own supervisory and enforcement authorities in the absence of robust federal oversight.
