1. “ Under the Hood” Predatory Lending in Dealer-Arranged Auto Loan Financing Delvin Davis

3. Dealer-arranged (Indirect) Auto Financing Background Data on Indirect Auto Lending and the Dealer F&I Department

4. Total Auto Loan Volume (Billions of dollars) Source: CNW Market Research Note: New sales data from franchise dealers only. Used sale data include franchise, independent and casual sales.

5. F&I Department Have Highest Margins of the Dealership Source: CNW Marketing Research

7. Direct and Indirect Market Shares by Loan Source Source: JD Power and Associates presentation (2008)

8. Cars are More Affordable, but Less Sustainable Source: Comerica Auto Affordability Index; CNW Marketing Research (repossession rates)

10. Auto Loan Sustainability and Affordability Using Auto ABS Pool Data to Examine Loan Delinquency and Rate Markup

13. Model 1: Dependent Variable – 60 Day DQ Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta B Std. Error (Constant) 2.280 1.098 2.076 .043 Avg Amount Financed (in '000s) .007 .014 .048 .479 .634 Weighted Avg FICO .001 .002 .086 .337 .737 % Used Sales in Pool -.002 .002 -.162 -1.158 .252 Weighted Avg Term -.030 .015 -.254 -1.938 *.058 Captive with Markup Cap -.257 .116 -.252 -2.222 **.030 Bank -.252 .153 -.226 -1.648 .105 Finance Co. -.012 .157 -.011 -.074 .942 Change in Unemployment Rate -.001 .003 -.084 -.335 .739 Change in Foreclosure Rate .006 .004 .508 1.322 .192 Change in Bankruptcy Filings -.008 .007 -.468 -1.217 .229 Change in Fed Reserve Prime Rate -.010 .010 -.122 -1.014 .315 2008 Issuance .088 .281 .094 .314 .755 2009 Issuance -.214 .410 -.216 -.522 .604 2010 Issuance -.417 .421 -.367 -.991 .326 Estimated Rate Markup .112 .036 .983 3.110 ***.003

15. Model 2: Dep Variable – Estimated Rate Markup Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta B Std. Error (Constant) -3.414 3.548 -.962 .340 Avg Amount Financed (in '000s) -.138 .039 -.116 -3.563 ***.001 Weighted Avg FICO -.058 .004 -.740 -16.237 ***.000 % Used Sales in Pool .018 .006 .140 2.853 ***.006 Weighted Avg Term .155 .045 .150 3.486 ***.001 Captive with Markup Cap -1.241 .389 -.144 -3.193 ***.002 Bank .537 .467 .058 1.150 .255 Finance Co. -.432 .503 -.049 -.859 .394 Fed Reserve Prime Rate .948 .689 .087 1.375 .174 Fed Reserve 3-Year Rate -.602 .263 -.114 -2.289 **.025 Fed Reserve BBB Rate .215 .378 .042 .568 .572 FICO x Captive w/Cap Interaction .030 .010 .114 3.175 ***.002 Fitted Investor Rate -1.546 .842 -.183 -1.835 *.071

17. Buy Here Pay Here Dealerships Churning vehicles with high markups, promoting extremely high default rates

19. BHPH Industry Data 2009 2008 2007 2006 Number of Weekly Payments 132 129 134 131 Average Weekly Payment $84 $84 $85 $82 Amount Financed $9,294 $9,195 $9,085 $8,844 Downpayment $1,040 $1,089 $1,018 $900 APR 24.4% 24.5% 28.3% 25.1% Actual Cost Per Vehicle (including rehab) $5,064 $5,284 $5,111 $4,949 % Vehicle Sale Markup 83.5% 74.0% 77.8% 78.7% Weeks Until Dealer Breaks Even at ACV 48 50 48 49 Average Default Rate 30.1% 28.4% 27.7% 26.2% Bad Debts (% Written Off) 20.0% 21.0% 19.0% 20.0% Troubled Loans (Defaults + Bad Debts) 50.1% 49.4% 46.7% 46.2%