Magnificent News: Personal Finance: As used-car prices surge, a federal watchdog is warning lenders not to illegally repo people’s vehicles

Wednesday, March 2, 2022

Personal Finance: As used-car prices surge, a federal watchdog is warning lenders not to illegally repo people’s vehicles

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Your retirement with Michelle Singletary.

By Michelle Singletary

As used-car prices surge, a federal watchdog is warning lenders not to illegally repo people's vehicles

(iStock)

Repossessing a car is supposed to be the last resort for lenders, who can usually make more money working out a payment plan with borrowers than selling the car at an auction for a loss.

But the pandemic has changed so much in the world of finance.

A global semiconductor chip shortage is leading to historically high prices for used cars. This surge might tempt the companies that service auto loans to be too quick to repossess cars to take advantage of an overheated used-car market, said Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB).

So Chopra has a message for the companies that service auto loans: Don't illegally repo people's vehicles. We are watching.

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