The American Financial Services Association (AFSA) has challenged a recent report by the Consumer Federation of America (CFA) regarding auto loan delinquencies, stating that it contains misleading conclusions and lacks supporting data.
According to AFSA, the CFA's assertion that auto financing is at a "breaking point" is not supported by reality. The association attributes higher vehicle costs to legitimate factors such as new technologies in performance and safety, as well as stricter regulatory standards. AFSA accuses CFA of downplaying or ignoring these considerations, thereby misleading consumers into blaming lenders. The association describes this narrative as irresponsible and a disservice to the truth.
CFA has depicted auto debt as an impending economic disaster. However, AFSA points out that Federal Reserve figures cited by CFA itself show that average total auto debt was $18,900, which is barely above its level 20 years ago. According to AFSA, these figures indicate that auto debt levels are stable and manageable, contradicting CFA's alarmist messaging.
The delinquency data further counters CFA's crisis narrative. The New York Federal Reserve found that 5 percent of aggregate auto loan balances were severely delinquent, unchanged from the previous quarter and lower than before the pandemic in 2020. AFSA highlights this as evidence that borrower distress is stabilizing rather than worsening.
AFSA also criticizes CFA's reliance on consumer complaints filed with the Consumer Financial Protection Bureau (CFPB). The association notes that these complaints are not vetted for legitimacy or accuracy and may include inquiries or unrelated issues rather than genuine grievances. By using such unverified data as evidence of "egregious auto financing conduct," AFSA argues that CFA undermines its own credibility and spreads misinformation.
The American Financial Services Association represents consumer credit lenders and financial services firms nationwide. With over a century of advocacy, AFSA focuses on promoting safe and fair access to credit while providing regulatory guidance and training. According to its official site, the association excludes payday and vehicle title lenders from membership.
