To help lenders stay up to date with compliance cases that apply to the powersports industry, Powersports Finance has started a quarterly feature spotlighting notable cases.
One such case involves subprime auto lender Exeter Finance, which agreed to pay more than $6 million to Delaware and Massachusetts for unfair lending practices, David Gemperle, partner at Nisen & Elliot, told PSF.
While the case was for an auto finance company, unfair lending is a subject that applies to powersports lenders, Gemperle said.
In the Exeter case, the attorneys general from the two states alleged that Exeter originated loans that the company knew or should have known were unfair and in violation of state consumer protection laws. The case is a sign that regulators could be placing more focus on unfair lending practices and that lenders are financing loans within a consumer’s budget.
“The key that is interesting about these settlements is the focus on the ability to repay,” Gemperle said. “They are imposing a duty on creditors to really figure out if someone can actually afford the monthly payment that they were given in their loan obligations.”
Check out the recording below to learn more details about the Exeter case, as well as topics such as ancillary products and the repossession of servicemembers’ vehicles.