NIADA submitted a comment letter to the Consumer Financial Protection Bureau (CFPB) in response to its Advance Notice of Proposed Rulemaking (ANPR) concerning the Larger Participant Rule (LPR) for the auto financing market on Sept. 19.
NIADA contends that the current activity threshold – defined as 10,000 or more loan originations annually – is too low and should be raised. Under the existing threshold, many NIADA member dealers are subject to CFPB examination.
Citing the CFPB’s own market analysis, NIADA’s comment letter argues for increasing the threshold to 1.05 million originations, a change that would significantly reduce the number of entities subject to examination while still covering nearly 50 percent of annual loan originations.
“NIADA appreciates the Bureau’s willingness to exercise greater regulatory discretion in its oversight of automotive financing. We value the opportunity to contribute to the body of information that we hope will support a formal notice-and-comment rulemaking process. A well-calibrated automobile finance LPR that reflects marketplace realities and minimizes unnecessary regulatory burden on small and mid-sized businesses will enable affected dealers to reinvest limited resources into their operations, enhancing the customer experience and expanding access to reliable, affordable vehicles to those who need them most,” said NIADA CEO Jeff Martin in comment.
The ANPR serves as a preliminary step in the rulemaking process to gather input and assess the need for formal regulation. NIADA is optimistic that the feedback provided will encourage the CFPB to move forward with a proposed rule and looks forward to contributing to that process.
