WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) published a rule today that will allow the agency to supervise larger nonbank auto finance companies for the first time. Providing accurate information to credit bureaus: The Bureau will assess whether information auto finance companies provide to credit bureaus is accurate. Factoring companies will often also make available additional debt recovery litigation services if they should become required. In a short span, number of non-banking financial institutions has drastically grown up. Now, finance companies are 44 in numbers.
Depending on the size of the company, it may be licensed in one state or dozens of states, says Danielle Fagre Arlowe, senior vice president of the American Financial Services Association, a trade association for the consumer credit industry that represents traditional installment lenders, such as the big auto finance companies.
If you are considering getting financing through a finance company, you should check to make sure it is licensed in your state, Sherry says. Before signing on the dotted line with a finance company, understand exactly what you are getting into. Again, the Standing Committee seeks to redraw the lines placed by the Companies Bill, 2011.
For regulatory purposes, NBFCs have been classified into the 3 broad categories, (a) those accepting public deposits; (b) those not accepting public deposits but engaged in financial business; and (c) core investment companies (which are exempted from the requirement of obtaining registration from the RBI, except CIC-ND-SI).
Wave of establishing finance companies began only when NRB authorized co-operative institutions set up under Co-operative Act, 2048 to accept deposit and give credit. The CFPB recently took an enforcement action against an auto finance company that distorted consumer credit records by inaccurately reporting information like the consumers’ payment history and delinquency status to credit bureaus. Non-bank institutions also frequently support investments in property and prepare feasibility, market or industry studies for companies.