Regulators Scrutinize Auto Lenders Over Add-Ons

May 16, 2013
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The Consumer Financial Protection Bureau has issued subpoenas to U.S. auto lenders over the sale of extended warranties and other financial products, according to people familiar with the investigation, expanding a civil probe that lenders say could slow the booming car-loan industry.

Any new restrictions could affect millions of Americans who use loans to buy new and used vehicles each year.

Add-on products, such as extra insurance, are a popular mechanism used by car dealers to boost profits.

Though such products are legal, regulators are probing whether terms and prices are adequately disclosed.

The CFPB has pursued a similar strategy with credit card companies, fining them over the use of deceptive marketing practices to sell products like identity-theft protection.

Story by Robin Sidel and Alan Zibel for the Wall Street Journal.

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