The CFPB has announced efforts to thwart illegal repossessions in the heated auto market. CFPB Compliance Bulletin 2002-04, issued recently, 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. Such conduct has a potential for violations of sections 1031 and 1036 of the Dodd-Frank Dodd-Frank Act’s prohibition on engaging in unfair, deceptive, or abusive acts or practices (UDAAPs) when repossessing vehicles.
The Bureau's press release says that current strong demand for used automobiles 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.
The Bulletin describes instances, in examinations and enforcement actions, where servicers violated the Dodd-Frank Act’s prohibition against unfair, abusive, or deceptive acts and practices such as:
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