Auto Finance ProbeAs discussed in the UK section of this report, in January 2024, the UK Financial Conduct Authority (FCA) launched a probe into auto lenders’ use of "discretionary commissions" that incentivized finance brokers and dealers to raise interest rates on auto loans until the practice was banned in 2021. "These motor finance firms were historically offering discretionary commission whereby they set a rate and gave the broker an opportunity to determine which rate is given to the customer," Kate Robinson, Principal at regulatory consultancy Avyse Partners, told the FT. "If you're a customer, you could have been charged a higher rate for the lending in order to increase the broker's commission."1 Analysts estimate that the total cost imposed upon the UK auto financing Industry from the investigation could reach £16 billion.2
In February 2024, the Central Bank of Ireland (CBI) stated that it was aware of the investigation, and would begin its own engagement with Irish lenders to ensure they had not engaged in similar misconduct.3
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