July 25, 2024

Legal experts raise doubts about the significance of CFPB’s negative equity report

Legal scholars are questioning the effectiveness of the much-anticipated report on negative equity recently released by the Consumer Financial Protection Bureau. This is partly due to the fact that the data includes the disruptions caused by the pandemic years. The CFPB report analyzes negative equity trends in auto financing using information from nine lenders and 34 million loan originations.


Q: What is negative equity?

A: Negative equity, also known as being “upside down” on a loan, occurs when the value of an asset (such as a car) is less than the amount of the loan remaining to be paid off on that asset.


It remains to be seen how much impact the CFPB report will have on the discussion surrounding negative equity in auto lending. The concerns raised by legal experts highlight the need for further examination of the data and its implications for consumer protection.

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