Nissan Motor Acceptance Corporation, a nonbank auto financing corporation that originates and services auto loans and leases, settled CFPB charges for engaging in "wrongful repossession" and servicing activities.
As described in the Consent Order, the CFPB alleged that the company had committed unfair and deceptive acts and practices, in violation of the Consumer Financial Protection Act of 2010, by (i) wrongfully repossessing vehicles, (ii) withholding personal property stored in the repossessed consumers' vehicles, (iii) depriving consumers of an option to significantly lower their fee when they made payments by phone, and (iv) misrepresenting consumers' bankruptcy rights.
In the Order, the company agreed to (i) provide between $750,000 and $1 million in cash redress to affected consumers and (ii) pay a civil money penalty of $4 million. Additionally, the company agreed to certain conduct and compliance requirements in order to prevent future violations.
Today's action by the CFPB is the second consent order in a month against a nonbank auto loan servicer, reflecting increased attention by the CFPB on this market. The Order also provides insight into what the CFPB considers to be "wrongful repossession" practices and the Order should be studied closely by market participants.
- CFPB Press Release: Consumer Financial Protection Bureau Settles with Nissan Motor Acceptance Corporation for Illegal Collections and Repossession Practices
- CFPB Consent Order: Nissan Motor Acceptance Corporation
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Ms Rachel Rodman
Cadwalader, Wickersham & Taft LLP
200 Liberty Street New York
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