TORRANCE, Calif. — Rick Hackett, a former official with the Consumer Financial Protection Bureau (CFPB), is on the cover of F&I and Showroom magazine’s May 2014 issue. He revealed to Editor Gregory Arroyo his views regarding F&I product sales, which he will delve into in more detail when he addresses attendees of the P&A Leadership Summit (PALS) on Tuesday, Sept. 9, at 9 a.m.
The former regulator, who joined Hudson Cook LLP in March as a partner in the firm’s Portland, Maine, office, told the magazine he believes the CFPB has jurisdiction over products that are tied into consumer vehicle financing, such as GAP and credit insurance, or are connected to consumer financial protection laws through the Truth in Lending Act. He also revealed that the buy-here, pay-here industry presents an opportunity for the bureau to learn more about how F&I products are sold.
“I think the F&I office does suffer from nontransparency of product value and price. When I buy a car, I know what the value of that product is,” Hackett told the magazine. “Then I go to the F&I office and you offer me a service contract. Where do I go to look for competitive pricing for a service contract? How do I compare the coverage of contract A and B? There’s no place to do that.”
Hackett also questioned how dealers priced F&I products. “There is a variable markup in many aftermarket products, and the delta over the wholesale price is very significant. Why is that?”
The former regulator spent 31 years practicing law before the CFPB selected him in 2011 as assistant director to lead its Office of Installment and Liquidity Lending Markets in its research, markets and regulations division. And until his departure this past August, he helped chart the bureau’s course into the auto finance industry.
“Rick’s stint in public service might be over, but it was clear to me during our interview that the regulator within him remains,” Arroyo said. “I’m excited to see how he’s received by product providers and administrators at this year’s summit.”
While at the CFPB, Hackett was responsible for advising all divisions of the bureau with respect to market information and policy issues in the installment and specialty lending areas, including auto finance, student lending and payday lending. Before joining the bureau, he served as a partner and leader of the Banking and Financial Services Group at Pierce Atwood LLP in Boston and Portland, Maine.
“We are excited to have Rick at this year’s summit. His address will be a must-attend session,” said David Gesualdo, show chair and publisher of F&I and Showroom and Auto Dealer Monthly. “As we all know, the CFPB hasn’t been very transparent about its activities. This will be the industry’s opportunity to hear from a former CFPB official on how the bureau views F&I product sales.”
The P&A Leadership Summit is a joint production between P&A and F&I and Showroom magazines. It’s scheduled for Sept. 8-9 at the Paris Las Vegas. For more info, visit pa-leadershipsummit.com or contact David Gesualdo via email or at (727) 947-4027.
