Santander Consumer USA Holdings Inc. announced net income for the second quarter of $265 million.
Total auto originations rose 1 percent to $5.5 billion.
Core retail auto loan originations rose 36 percent to $2.3 billion.
Chrysler Capital nonprime loan originations rose 11 percent to $948 million. Chrysler Capital prime loan originations were down 30 percent to $854 million.
Provision for credit losses increased to $521 million in the second quarter, from $512 million a year earlier.
Small-business owners' optimism about their business situation has edged up in the past quarter to a new 10-year high.
The Wells Fargo/Gallup Small Business Index for the latest quarter is at 106, up 11 points since the prior quarter and the highest since 113 measured in the second quarter of 2007.
Small business owners are more positive about the future than about their current circumstances, a pattern that has generally been the case historically. But, the overall increase in the index this quarter is mainly the result of an uptick in present situation ratings, rather than expectations about the future.
The present situation score rose to 45 from 36, while the future expectations score this quarter remained essentially constant. Both of these measures are as high as they have been since 2007.
If the Consumer Financial protection Bureau’s mandatory arbitration ban fails to take effect, part of the reasons will be questions about the data supporting it.
The Dodd-Frank Act that created the CFPB specifically required the agency to study the use of mandatory arbitration agreements in finance contracts. The CFPB released the results of that study in March 2015.
In announcing the ban, the CFPB said the study “showed that few consumers ever bring – or consider bringing – individual actions against their financial service providers either in court or in arbitration.”
The Republican Senators who are moving to block the rule cited what they consider poor use of data.
“This rule is based on a political study that 86 members of Congress warned was ‘not fair, transparent, or comprehensive,’” said Sen. Pat Toomey in a release about the Senate resolution. “Rather than reexamine its defective study, the CFPB has chosen to forge ahead with a flawed rule. Congress must now exercise its authority to block it.”
A major problem with the CFPB’s use of the study is an attempt to portray the benefits of class-action suits versus arbitration.
The release says the study found that “over 34 million consumers received payments, and that $1 billion was paid out to harmed consumers over the five-year period studied.”
By contrast, the study found that “in the roughly one thousand cases in the two years that were studied, arbitrators awarded a combined total of about $360,000 in relief to 78 consumers.”
The CFPB release says this proves “(i)ndividual actions get less overall relief for consumers than group lawsuits because companies do not have to provide relief to everyone harmed.”
While this is true, the amount individuals actually received is far greater under arbitration than class action using these examples – $4,615 on average of arbitration vs. $29 for class action.
“If finalized, this rule would actually cost consumers more in the long run by pushing consumers into class action lawsuits as opposed to arbitration,” said Sen. Mike Rounds.
Terry O’Loughlin, director of compliance for Reynolds & Reynolds, said the payment per consumer might prove small, but the cost of the company being sued is huge.
“Even just defending them can be very expensive,” O’Loughlin said.
The CFPB does give a secondary reason in favor of class actions and that is their ability to promote behavioral changes.
Another unusual aspect of the CFPB’s use of data in creating this rule comes from the use of alerts issued by law firms.
These are summaries sent out to a law firm’s client and others that provide information on recent activity on everything from legislation to court decisions to regulatory actions.
Joann Neddleman, an attorney with Clark Hill, said the CFPB used an increase in alerts warning of class-action lawsuits as part of its justification for the arbitration ban.
Neddleman said attorneys at her firm can’t recall another time alerts were cited in this way.
Credit Acceptance Corp. announced consolidated net income of $99.1 million for the three months ended June 30.
This up from consolidated net income of $84.9 million in the same period in 2016.
For the six months ended June 30, consolidated net income was $192.4 million, compared to consolidated net income of $159.3 million for the same period in 2016.
Mazda North America Operations (Mazda) is recalling 205,377 2009-11 Mazda 6, and 2007-11 CX-7 and CX-9 vehicles. These vehicles are equipped with certain air bag inflators assembled as...