Bank says it will no longer be able to provide auto financing
— Bank of America Corp. is ending its auto finance business as the federal government imposes new restrictions on its services.
The bank will no long be able provide auto finance services to borrowers under its credit line or to auto dealers under its lease, according to a statement.
The decision will apply to the entire Bank of America portfolio of auto dealers, and it will not apply to auto financing in any other way, the bank said.
The bank’s credit line has already been reduced to $300 billion.
BANK OF AMERICA CORPORATION DECLARES STANDOFF TO MAINTAIN PROFIT OVER AUTO FINANCE OF BANKSOURCE NBC News – February 28, 2021The decision comes after the U.S. Treasury Department announced a series of new restrictions that will limit the bank’s ability to issue auto financing to anyone in the United States.
The department said that if the bank can’t meet the requirements of the new rules, it will be unable to issue loans to borrowers or lease auto dealers.
The department also said that the bank will be required to post a list of all customers who can access its auto financing services and the amount of money it can provide, but it will allow those who have the option to skip those lists to access their auto financing.BANK OF AMERICA CORPORATION’S DEVELOPMENT OF AUTO FINANCING HAD HELD FOR THE ENTIRE BEGINNING OF THE 1940S SOURCE NBC NEWS – December 10, 2018The move comes after Bank of North Dakota decided to stop providing auto finance in the state of North Carolina after it lost federal approval for the services.
“Banks of North America is an essential component of our community and is critical to our ability to provide financing services to our customers in the states where they live and work,” Bank of New York Mellon Chairman Stephen C. Mirell said in a statement on Wednesday.
“Banks are a critical component of the economic health of our communities, and this decision is an important one for the American economy and the nation as a whole.”
Banks were able to continue providing auto financing through the federal Financial Institution Registration Corporation in the months leading up to the financial crisis.
The agency began issuing loans to the car dealers in the spring of 2010.
The decision to end its auto-financing business comes as the U,S.
Consumer Financial Protection Bureau is preparing to propose new regulations for auto financing and the banks.
The consumer agency has proposed new rules that would require the government to establish standards for auto finance.
The bureau has proposed the rule change on its website.
The rule change will be subject to public comment for 30 days before the agency releases a final rule.