Tag Archives: Consumer Financial Protection Bureau

CFPB to Auto Dealerships: Remember Consumer Rights

At Approved Loan Store, we believe it is important for every consumer to understand their rights, particularly when it comes to auto loans, and we want to commend the Consumer Financial Protection Bureau (CFPB) for reiterating those rights to dealerships and the general public this week.

Under the Equal Credit Opportunity Act, lenders cannot discriminate or alter the terms of a loan based on race, color, religion, national origin, sex, marital status, or age. A person cannot be charged a higher interest rate if they are old or young, black or white, married or single, or a person with or without religious affiliations. The CFPB is helping people to understand their rights and issuing instructions on legal recourse if a consumer is the victim of discriminatory practices. CFPB Director Richard Cordray stated emphatically this week that, “Consumers should not have to pay more for a car loan simply based on their race,” and we at Approved Loan Store couldn’t agree more.

Right here is one of the reasons why our customers love Approved Loan Store. We work for you to get the best terms possible on a new or used car, and our special finance representatives are educated on all the latest consumer protection laws so they can look out for your best interests. Our process makes it buying a car more simple and enjoyable.

Are you ready to get into a new or used car today? Approved Loan Store is ready to help YOU! Get started today by filling out our secure online auto loan application here, and for more auto news and buying tips, check out Approved Loan Store on Facebook, Twitter, and YouTube!

Auto Loan: New FICO 8 Unnecessarily Complicates Credit Score

Maintaining a good credit score is a tough task that takes time, attention, and diligence on the part of the consumer. Most Americans don’t even know their credit score, much less what it means or how it is calculated. Consumer groups and government agencies like the Consumer Financial Protection Bureau are trying to demystify credit reports and credit scores for the general public, but unfortunately, the credit reporting industry is, perhaps intentionally, making credit scores more confusing.

FICO scores have been the credit industry standard for years, ranging from 300 up to 850. When lenders talk about your credit score, it is likely they are referring to your FICO score. Recently, the Fair Isaac Corporation, which produces the FICO score, touted that the number of consumers in the top tier of credit scores has increased, and the number in the bottom tier has decreased. This sounds like really great news until Ann Carrns of the New York Times took a closer look.

As it turns out, the numbers they were touting were not based on the FICO score but rather a new-and-improved FICO score, FICO 8. FICO 8 is a new formula used to calculate that all-important credit score which can mean the difference between getting approved for a higher amount on a car loan or getting a lower interest rate. Fair Isaac Corporation will disclose that over 76,000 creditors are using FICO 8, but they would not say how many creditors are using the older FICO score model or how a consumer can find out which model a particular creditor is using. Even more frustrating, the FICO 8 credit score is not available for purchase from Fair Isaac Corporation, so consumers are left in the dark as far as their FICO 8 score is concerned.

I’ve been writing about the credit industry and how it relates to the auto industry for a while now, and this is one of the most ridiculous stories I have ever heard. Through this blog, we are trying to simplify the car buying process and give our readers the most basic information that every consumer needs to know to improve their credit and get the best rates on an auto loan. When it comes to credit scores, we often tell people to stick with the original and the industry standard, their FICO score. Now, even that most basic tip has been complicated with the old model FICO score vs. the FICO 8 model. The Consumer Financial Protection Bureau has promised that they will be closely monitoring the credit reporting industry, and I sincerely hope that they crack down on this nonsense. One last message to FICO: Your actions are confusing consumers and making credit way too complicated. Please stop.

No matter if you have good credit, bad credit, or no credit, Approved Loan Store wants to help you get into the car you want at terms you can afford! Fill out our secure online auto loan application here, and keep up with the latest auto news and consumer alerts by liking Approved Loan Store on Facebook, following Approved Loan Store on Twitter, and subscribing to Approved Loan Store on YouTube!

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Cordray, CFPB Tackle Discriminatory Lending

The Consumer Financial Protection Bureau is still getting its feet wet seeing as how the President just assigned Richard Cordray to the agency a few months ago. That doesn’t mean they don’t want to hit the ground running, though.

According to the the Chicago Tribune, Cordray mentioned discriminatory lenders in a recent speech and warned that they would be the first to really see the force of the new agency. “The Consumer Bureau is still in its infancy, but we will not be silent on discriminatory lending practices. Our twin goals here are to protect consumers and empower them to be able to protect themselves.”

The CFPB plans to monitor the financial institutions for potential lending violations. This will be regarding all forms of consumer credit including auto loans, credit cards, and student loans. According to the Equal Credit Opportunity Act, lenders are barred from basing credit decisions on race, color, religion, sex, or marital status. The CFPB will also be looking for disparate impact in lending in which lending practices aren’t discriminatory themselves but have discriminatory effects. Cordray also touched on this goal in his speech, stating, “This subtle but powerful form of discrimination creates damages that are no less direct than the kind of overt and blatant discrimination that, we hope and assume, is increasingly a relic of a bygone era.

To better illustrate the impact that these practices can have, the Chicago Tribune article highlights the disparity in African-American households. On average, the median wealth dropped more than 50 percent in the years 2005 and 2009. Hispanics saw even worse results, losing 66 percent in their wealth. This has not stopped the discriminatory lending from targeting these groups, however.

The CFPB looks to be a powerful force in aiding the consumer in a time where everyone is looking to take advantage of them. One of the key tools they plan on using is education. They want to make sure that everyone has the right knowledge to keep from being victims. “Whether they are applying for an auto loan, student loan, or home loan, consumers need to know their rights and they need to know what red flags to look for that may indicate their rights are being violated,” Cordray said. “We want consumers to be able to recognize when they may be victims of discrimination.”

Approved Loan Store is the honest way to get approval for a car loan, even if you’re suffering from bad credit. Fill out an application to see the process work for you and see why so many have proclaimed their love for the services ALS provides. Be sure to like us on Facebook and follow us on Twitter so we can keep you educated on industry news.

Auto Lenders Optimistic About Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau has been out of the news as of late.  With President Obama finally selecting someone to lead it, it’s now in its infancy and about to embark on what it was created to do.  To this extent, Autonews.com reports that members of the CFPB have begun to meet with auto loan traders.  With so much mystery behind just what the bureau intends to do, the members of the American Financial Services Associations who were involved in the private meetings walked away with optimism about what was going to happen next.

AFSA CEO Chris Stinebert was impressed by the agencies want to make measures based entirely on data rather than knee jerk reactions.  “There are some good people at the CFPB — honest, dedicated, hardworking people with good experience and background. We have been very encouraged in our dealings with them.  They are not shooting from the hip. They state repeatedly they want to base decisions going on facts — not on anecdotes, but on data, on empirical research. If that is true, then we have very limited concerns.”

CFPB Assistant Director Richard Hackett echoed this approach to regulations they would pass.  “Our decisions on use of regulatory tools, whether enforcement, supervision, or otherwise, will be informed by data from stakeholders, including industry.”

According to the article, auto dealers will be exempt from the bureau with the exception of buy here, pay-here stores.  That being said, it’ll be impossible for dealers not to be affected by what happens to the auto lenders.  That leaves many of the lenders still anxious to see what happens next.  Bill Himpler, the AFSA executive vice presidents said, “Despite what we hear from the CFPB staff, what we hear from the field I don’t think really lowers our anxiety level.”

Approved Loan Store is looking to make the loan process easy for you.  For more information on getting a car loan for yourself, visit the Approved Loan Store to start the process and look into getting the car you want.  Be sure to also follow on Facebook so you can stay up to date on any offers and all the latest financial news.