Despite efforts by trade associations, and Harley Davidson Financial Services in particular, motorcycle loans were not exempt from the 10,000 — annual — originations threshold set by the Consumer Financial Protection Bureau in its finalized “larger participant” rule, announced June 10.
During the open comment period following the bureau’s proposed rule, HDFS argued that the motorcycle lending market should not be regulated alongside the car lending market, because a motorcycle is a lifestyle choice and does not qualify as an automobile as defined by the CFPB.
In the final rule, the CFPB acknowledged that “industry participants, two trade associations, and several members of Congress urged the bureau to exclude motorcycles from the definition of automobile,” under the basis that a motorcycle is not a necessity. However, the regulatory agency also wrote that the similarities in the financing process, compliance requirements, pricing, and how the vehicles may be used “support inclusion in the same market for supervisory purposes.”
“Although the proposal noted that automobiles are important to many consumers as a means of transportation to work,” the CFPB wrote in the rule, “The bureau did not intend to suggest that the rule would only cover vehicles that are used for that purpose or that the financing of vehicles used for recreational purposes is unimportant.”