In a compliance bulletin issued today, the CFPB signaled that it will hold auto loan holders and servicers “accountable for [unfair, deceptive or abusive acts and practices] related to the repossession of consumers’ vehicles.” The bulletin reminds lenders and servicers of existing laws regarding auto repossessions and provides examples of types of conduct that might violate the law.
The CFPB said that auto lenders, loan holders and servicers should consider reviewing their policies and procedures regarding repossession and cancellation of repossession; ensure prompt communications between the servicer and the repossession service providers when a repossession is canceled and monitor compliance with cancellations; incorporate the monitoring of wrongful repossessions in regular audits of customer communications; and ensure they have corrective action programs in place to address any violations and reimburse consumers for costs incurred as a result of unlawful repossessions.
Firms should also review their payment allocation policies, any fees that are charged and consumer complaints regarding repossessions. They should also conduct regular reviews of service providers and monitor any force-placed collateral protection insurance programs to ensure that consumers are not charged for unnecessary force-placed insurance.
