Venable partner Jonathan Pompan
was quoted in a May 1, 2014 Law360
article on BMO Harris Bank's decision to use flat fees in its indirect auto lending. The move drew praise from the Consumer Financial Protection Bureau (CFPB) which has been looking closely at banks involved in indirect auto lending. Despite the praise, it remains unclear if other lenders will follow suit until they see whether dealers continue to do business with BMO since they will not be able to charge profitable markups on car loans.
According to Pompan, the CFPB’s endorsement is likely meant to push other lenders to adopt a similar flat fee policy. “It's not every day that the head of a government agency comes out publicly in support of an individual market participant,” he said. “The CFPB has come out with a virtual safe harbor.”