Auto lenders, dealers face heightened state enforcement as CFPB ex-Director Chopra advises attorneys general

Auto lenders and dealers are likely to face tighter scrutiny and more aggressive enforcement from Democratic state attorneys general, guided by a new playbook Rohit Chopra helped design while running the CFPB. His move into a formal advisory role for a blue‑state AG working group means many of his former CFPB priorities may now be pursued at the state level, even as federal enforcement has been scaled back under the Trump administration.​

What just happened

• The Progressive State Leaders Committee hired former CFPB Director Rohit Chopra as senior adviser to its new Consumer Protection and Affordability Working Group, which is affiliated with the Democratic Attorneys General Association.​

• Chopra was removed as CFPB director by President Trump in February 2025, and the Bureau has since announced a much softer examination and enforcement posture going into 2026.​

• The new AG working group’s mandate includes developing coordinated strategies on consumer finance, with auto lending and dealership practices among the priority sectors.​

Why state enforcement is ramping up

• Under Chopra, the CFPB explicitly encouraged state attorneys general to act as front‑line enforcers, including through a 2022 interpretive rule on state authority and a later roadmap titled “Strengthening State‑Level Consumer Protections.”​

• Those documents urge states to adopt CFPA‑style bans on “abusive” conduct, expand AG investigative powers, enhance private rights of action, curb “junk fees,” and strengthen data/privacy protections.​

• With federal CFPB enforcement curtailed, Democratic AGs are positioning themselves to “fill the gap” and use this Chopra blueprint in areas like auto finance, where state law and licensing are already central.​

Specific implications for auto lenders and dealers

• The CFPB cannot directly supervise most auto dealers, but Chopra has long emphasized using state AGs, the FTC, and other regulators to reach dealer behavior indirectly through lenders and joint enforcement.​

• Experts expect heightened scrutiny of practices such as vehicle price inflation, dealer reserve and markups, subprime underwriting, treatment of add‑on products (GAP, service contracts), collections, and repossessions.​

• Prior CFPB and joint state actions against subprime auto lenders are likely to be used as templates for new, state‑led cases, including theories based on unfair, deceptive, or abusive acts or practices.​

What auto finance companies should do now

• Review pricing, dealer compensation, and add‑on product programs for UDAAP and “junk fee” risk under aggressive state standards, not just federal ones.​

• Reassess dealer oversight: monitor how dealers market financing, disclose terms, and structure deals, and document efforts to detect and remediate abuses.​

• Track actions and guidance from Democratic AGs and the Chopra‑advised working group, as their coordinated initiatives are expected to drive multi‑state investigations and settlements in auto finance.​

If you share your role (lender, dealer group, vendor, or counsel) and states you operate in, a more tailored risk checklist can be outlined.