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The U.S. consumer watchdog on Wednesday announced plans to scrutinize big non-bank auto finance companies for the first time, citing concerns about how the lenders market car loans and collect on debts. The Consumer Financial Protection Bureau already oversees banks that issue car loans and has raised concerns about their lending practices, such as potential discriminatory pricing that has harmed minority borrowers. The bureau's new proposal would allow it to regulate 38 non-bank auto lenders that make or refinance at least 10,000 loans or leases per year. Those companies make about 90 percent of the non-bank car loans in the U.S., the bureau said.
The bureau did not identify which lenders it would scrutinize. But the lending arms of Ford Motor Co., Toyota Motor Corp. and Honda Motor Co. are among the largest non-bank lenders and have snapped up auto finance business from banks. "We took action after we uncovered auto-lending discrimination at banks we supervise," CFPB Director Richard Cordray said in a statement. "Today's proposal would extend our oversight, allowing us to root out discrimination and ensure consumers are being treated fairly across this market."