The number of auto-loan-related complaints to the Consumer Financial Protection Bureau (CFPB) was higher in the five months from March to
July than any other five-month period.To get more
auto finance news, you can visit shine news official website.
The public-interest group U.S. PIRG Education Fund said government
intervention at all levels is needed to protect consumers, but that's
highly unlikely to happen before the election.
The Trump administration has made a point of how the bipartisan CARES
Act, which passed in March, has helped average Americans. Whether it was
the Economic Impact Payments or the Paycheck Protection Program, there
was an undeniable push earlier this year to help the millions of people
impacted by the coronavirus. But dig into the details a little bit, and
you'll soon see how the CARES Act didn't come close to covering every
aspect of financial damage that the COVID-19 pandemic has wrought on the
economy.
Case in point: auto loans. Some types of loans were affected by the CARES Act, including forbearance for federally backed loans for some
multifamily rental property owners and mortgages, as well as a temporary
suspension of federal student loans. But auto loans were not protected
in any way. That meant that anyone with an auto loan who missed some
payments over the last half-year might have taken a hit to their credit
score.
As the U.S. House Committee on Financial Services said in early April, "The CARES Act suspends negative credit reporting for eligible
federal student loan payments only, but not for any other loan
obligation." Individual auto-loan lenders may have offered some
COVID-related relief, but there is nothing in the CARES Act that forced
them to do so.
Given all of this, it's unsurprising that problems with auto loan debts are exploding. A new report from the U.S. Public Interest Research
Group (PIRG) Education Fund found that there has been a "sharp spike"
in complaints to the Consumer Financial Protection Bureau (CFPB) related
to auto purchasing, leasing, and financing since the beginning of the
pandemic. The hard numbers in the CFPB's complaint database show that
more than 2800 auto loan and lease complaints were submitted between
March and July 2020. That is more than during any other five-month
period in the history of the database, U.S. PIRG said.
Since the beginning of March, more than one in five complaints about
auto loans or leases have mentioned COVID-19. These complaints were
about a number of issues, including being denied auto loan payment
relief, changing loan terms, billing problems, and harassing behavior by
debt collectors.
Complaints about auto loans have been flowing into the CFPB for years. Ed Mierzwinski, the senior director of U.S. PIRG's federal
consumer program, told Car and Driver that when you look at the number
of complaints per company regarding "vehicle loan or lease" between
April 2017 and July 2020—which is basically the time frame covering the
full range of available complaints since the CFPB reorganized complaints
in the database in April 2017—you can see that lenders including
Santander and Ally Financial received the most complaints (2347 and
1437, respectively). But automaker financial arms were also on the
receiving end of unhappy customer reports. The General Motors Financial
Company was the subject of 938 complaints, followed by Toyota Motor
Credit Corporation (742), Hyundai Capital (677), Nissan Motor Acceptance
Corporation (515), and American Honda Finance Corporation (453).
