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CPS Subpoenaed By DOJ

January 27, 2015

IRVINE, Calif. — In a regulatory filing posted last week, Consumer Portfolio Services revealed that the U.S. Department of Justice has subpoenaed the finance source, requesting documents related to its subprime auto finance practices and related securitization activities.

CPS received the subpoena on Jan. 14, according to the Securities and Exchange Commission filing. “Other purchasers of subprime automotive receivables have disclosed receiving similar requests at various times since July 2014,” the document read, in part.

Those other purchasers include Santander Consumer USA, Ally Financial, GM Financial and Credit Acceptance. In recent months, the DOJ has also threatened Toyota Motor Credit Corp. and American Honda Finance Corporation with enforcement actions related to the finance sources’ auto lending practices, which have allegedly resulted in discriminatory pricing.

Comments

  1. 1. Jim Dirks [ January 27, 2015 @ 02:24PM ]

    "...which have allegedly resulted in discriminatory pricing.". Yet to my knowledge, they have yet to demonstrate a single case of discriminatory pricing/lending. Just an accusation and penalties, which to date, no one has been willing to spend the money to fight.

  2. 2. Mike Crane [ January 28, 2015 @ 11:37AM ]

    You are dead on the money Jim. We work with many of these lenders daily and nothing like it - race, age, sex, etc... comes into question during the underwriting process yet these lenders are being "convicted" of discriminatory practices anyway. I thought I was the only one watching this unfold and wondering why they were forking over tens of millions instead of standing up for themselves. I realize the cost of litigation to fight the battle is extreme but this is getting to the point of being ridiculous with the amount of settlements they are making when it appears to be very obvious they are innocent of the charges.

  3. 3. t Scott fradenburgh [ January 28, 2015 @ 01:34PM ]

    100 blacks watching football, both husband and wife and 100 whites, husband's and wife; guess the average FICO SCORES of the two groups. Also it's a mishmash of different educations and incomes, both in line with real world values.
    There will be a disparity of around 100 fico points between the two groups. EVERY time. The black group being the lower of the two.
    Not true with asians, or hispanics?
    Is that some secret racist plot against blacks?
    I don't think so.

  4. 4. William V. Fowler [ January 31, 2015 @ 09:28AM ]

    Their is a great deal of misunderstanding on the issue of disparate impact, and the loan approval process dealers and lenders are using. Their present process leaves both them wide open for this argument.

    My company E-net Financial Services, Inc. has designed a new auto loan origination process that will relieve dealers and their financing sources of this legal nightmare.

    Contact me if you desire more information, or read my postings on many LinkedIn sites.

 

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