Auto Finance News: Chase Auto and Subaru Renew Their Vows

From Chase Auto securing the renewal of Subaru financing, auto loans getting left out of the CARES Act, and ramifications of Nissan’s settlement with CFPB — here’s a roundup of the top auto finance news stories of the third week of October.

1. Chase Auto Secures the Renewal of Subaru Financing Arrangement

• Chase Auto and Subaru Motors have extended their private-level financing arrangement, continuing the captive-like relationship of more than 19 years.
• Chase Auto has financed nearly four million borrowers and works with 630 Subaru dealers.
• The length of the extension has not been stated. Since last year, Chase Auto has dedicated itself to expanding strategic partnerships for its private-label infrastructure.
• These partnerships include an arrangement with Vroom (a digital retailer).
• The decision to extend the Subaru financing arrangement comes on the heels of Mazda Motors’ decision to move its captive finance business from Subaru to ToyotaFinancial Services.

2. The CARES Act Leaves Out Auto Loan Borrowers

• The Trump administration passed the CARES Act in March to help Americans impacted by the coronavirus. Initiatives such as the Payment Protection Program and the Economic Impact Payments gained widespread attention.
• And while the CARES Act suspended negative credit reporting for certain loan types like student loans, auto loan borrowers were not helped in any way.
• In other words, anyone who missed auto loan payments since the crisis started may have seen their credit score take a hit. Given the lack of federal support for auto loan borrowers, it comes as little surprise that the number of auto-loan-related complaints to the CFPB was higher from March to July 2020 than any other five-month period.
• The auto lenders that received the most complaints are General Motors, which received 938, followed by Toyota (742), Hyundai (677), Nissan (515), and Honda (453).
• A relief package is unlikely to be granted to borrowers before the November 3rd elections.

3. Takeaways From Nissan’s Settlement with CFPB

• The Consumer Financial Protection Bureau (CFPB) found Nissan Motor Acceptance Corp. violated several regulations related to vehicle repossessions.
• The total settlement came to $5 million.
• Takeaway #1: Be sure your state permits the creditor or its agent to charge a fee for the return of personal property left in a vehicle.
• Takeaway #2: Be transparent about payment fees and communicate with customers about lower or no fee payment methods.

Bonus: A U.S. Automaker Snatches the Title of World’s Fastest Production Car

• SSC North America announced that its Tuatara hypercar reached an average speed of 316 miles per hour.
• The futuristic car was tested on a seven-mile stretch of a Nevada highway on Saturday.
• It also gained the distinction of highest speed ever reached on a public road, at 331.15 miles per hour.
• The model’s design is inspired by fighter jets. It is a result of over 10 years of R&D research.

Staying on Top of Compliance Has Never Been Easier

Keeping up with compliance requirements is harder than ever in this constantly changing regulatory environment. Nissan’s settlement with the CFPB and the surge in auto lender consumer complaints in recent months suggest worrisome trends. Auto lenders need to act now to ensure compliance without sacrificing efficiency. Lightico makes it easier for auto finance professionals to create compliant originations and servicing processes through a system of flexible automated workflows including eSignatures, eForms, and digital stip collection. Learn more at Lightico.com.