The battle over how the Consumer Financial Protection Bureau polices discrimination cases has long been one of the most contentious wars waged between the auto finance industry and its regulators. This battle had led to multi-million-dollar consent orders, has forced or persuaded several lenders to cap their dealer compensation rates, and has prompted at least two lenders to pursue flat-rate policies that resulted in reduced volume. Now, new leadership at the CFPB seems to be conceding that war, and lenders will have new incentives to raise dealer compensation rates and forego flat-rate policies, lawyers told AFN.

In February, the CFPB reorganized the Office of Fair Lending and Equal Opportunity — the division most directly responsible for enforcing cases of discrimination — under the Director's Office of Equal Opportunity and Fairness, effectively stripping its powers.

The reorganization of the fair lending office may be somewhat symbolic, but every message the CFPB is sending the industry indicates fair lending enforcement will not be a priority, said Chris Willis, practice leader of Ballard Spahr's Consumer Financial Services Litigation Group.

"Highly aggressive legal theories relating to fair lending are not going to be something that the agency pursues while Acting Director Mick Mulvaney is leading it," Willis said.

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