Lawmaker probes wrongful repos (Under the Hood)

Sen. Elizabeth Warren is reviving scrutiny of lenders’ repossession protocols on the heels of rising repo rates. The Massachusetts Democrat — who serves as the ranking member of the Senate Banking, Housing and Urban Affairs Committee — sent letters on Feb. 4 to lenders Ally Financial , America’s Car-Mart , Byrider , Capital One , CarHop , Chase Auto , DriveTime , GM Financial and Toyota Financial Services , along with trade groups American Financial Services Association , American Recovery Association and National Independent Auto Dealers Association . Warren gave recipients 12 days to provide information about repossession policies and error rates dating back to 2022. Notably, the imposed response deadline was Feb. 16, a federal holiday. CFPB pullback prompts repo questions The letters, whose language was predominantly identical, opened with Warren’s explanation that she was requesting the information because the Trump Administration had “kneecapped” the Consumer Financial Protection Bureau ’s “ability to protect consumers from auto repossession errors.” The senator was referring to the May 2025 withdrawal of the CFPB’s bulletin entitled “Mitigating Harm from Repossession of Automobiles.” The 2022 guidance outlined the agency’s oversight of UDAAP (unfair, deceptive or abusive acts or practices) violations in auto repossession, focusing on wrongful repossession of consumers’ vehicles. Warren noted that consumers are “struggling to afford cars,” and rising delinquency and repossession rates are a “blaring alarm that American consumers are hurting financially.” She proceeded to describe how losing access to a car often triggers loss of a paycheck and limits consumers’ abilities to care for their families. After describing the general process of repossession, Warren then noted the lack of public data surrounding repo error rates. With that, she outlined five questions — with 35 subparts — spanning repo volume, towing, consumer disputes, starter-interrupt devices, personal property left in vehicles and a host of other topics. Lender practices Among the publicly traded companies to which Warren addressed letters, several provide information in their SEC filings about repo procedures. For instance, buy here, pay here lender America’s Car-Mart explains in its most recent 10-Q filing that the company “strives to keep its delinquency percentages low, and not to repossess vehicles.” An account is considered delinquent when a customer falls one day behind on his contractual payment. At that point, America’s Car-Mart contacts the borrower by phone or text message, attempting to resolve payment delinquencies amicably. For vehicles that are repossessed, “the majority” are surrendered voluntarily, according to the 10-Q. Other repossessions are performed by company personnel or third-party agents. Within the portfolio, 3.1% of finance receivable balances were 30 or more days past due for the quarter ending Oct. 31, 2025, compared with 3.5% in the prior-year period, according to the America’s Car-Mart 10-Q. Accounts averaged 73 days past due at charge-off for the October 2025 quarter. Ally, meanwhile, typically initiates repossession activity when an account hits 90 days past due. At that point, the company assigns the account to an approved third-party repo vendor. Once a vehicle is repossessed, the customer is allotted a certain amount of time to bring the account current. If that does not happen, the vehicle is sold at auction. “Generally, the proceeds do not cover the unpaid customer balance, including unpaid earned finance charges and allowable expenses, and any remaining deficiency after consideration of previous write-downs is charged-off,” according to the lender’s most recent 10-K. Ally’s consumer auto loans are fully charged off once they hit 120 days past due. Repossessed consumer automotive loan assets totaled $221 million as of Sept. 30, 2025, compared with $207 million at yearend 2024. Trade group response As for the trade groups, NIADA and AFSA responded publicly to Warren’s information request. Broadly, NIADA noted that it does not collect or maintain data on the specific metrics requested, and even if it did, the information would be deemed confidential. While the buy here, pay here trade group acknowledged that vehicle repossession is a “difficult and emotional experience for consumers,” it also pointed out that vehicle recovery is a “labor-intensive and costly process” that “finance companies endeavor to avoid initiating whenever possible.” Similarly, AFSA pointed out that auto finance companies “have every incentive to avoid repossession because they lose more money in the process than other delinquency-resolution arrangements.” The consumer credit industry trade association also noted that Warren’s reference to default rates increasing at a “nearly identical pace” to default rates leading up to the 2008 financial crisis is an apples-to-oranges comparison. Citing data from Cox Automotive and Experian , AFSA clarified that while the number of repossessions in 2024 and 2025 were the highest since 2009, the peak year of the financial crisis, “the credit base in 2025 was 35% higher than it was in 2009, and the repo rate in 2025 was 27% lower than it was in 2009.” Stay tuned for fallout from Warren’s data request. It remains to be seen whether the Senate will take action or whether state attorneys general might jump on the bandwagon. Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with Auto Finance Summit East and Auto Finance Capital Summit in May. To see event agendas and register, visit autofinance.live .

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Lawmaker probes wrongful repos (Under the Hood)

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