The Consumer Financial Protection Bureau (CFPB) is moving to thwart illegal repossessions in the heated auto market. A compliance bulletin issued today reveals conduct observed during CFPB examinations and enforcement actions, including the illegal seizure of cars, sloppy record keeping, unreliable balance statements, and ransom for personal property, according to a CFPB press release. “With today’s high car prices, auto lenders and investors might be tempted to seize vehicles for resale in the hot used car market,” said CFPB Director Rohit Chopra. “No American ever wants to wake up to see their car stolen. Auto loan servicers need to ensure that every repossession is lawful.” Due to the global chip shortage, the average list price for new and used vehicles has spiked, creating a strong demand. The CFPB is concerned that these market conditions might create incentives for risky auto repossession practices, since repossessed automobiles can command higher prices when resold. The CFPB also expects that both the total amount of debt and the average loan size will continue to increase. Even when inventory shortages abate, larger car loans will put pressure on household budgets for much of the next decade.
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