Watchdog Group Cites Widespread ‘Predatory’ Lease Agreements

CFPB Study Shows Truckers at Risk of Entering Into Unfavorable Contracts

The Consumer Financial Protection Bureau study documented an array of unfavorable agreements of owner-operator truck financing products and their impact on driver earnings. (andresr/Getty Images)

A yearlong study by a U.S. government financial consumer group has concluded that there is widespread risk for truckers being rushed into signing so-called predatory lease-purchase agreements that hide or fail to make clear the details drivers are agreeing to pay.

The study was conducted by the Consumer Financial Protection Bureau, an independent federal agency whose mission centers on ensuring that people are treated fairly by banks, lenders and other financial institutions.

The study was presented during a Federal Motor Carrier Safety Administration truck-leasing task force virtual meeting last month. The nine task force members range from attorneys, a labor representative and owner-operator to an academic, and logistics and trucking company representatives.

The authorizing legislation mandated that CFPB assist the task force in its work.

The group is examining leasing agreements and terms that mostly adversely impact owner-operators and small trucking companies subject to the agreements. The task force will report its findings late next year to the secretary of transportation, secretary of labor and “appropriate committees of Congress.”


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In research and interviews with truck drivers, their advocates and attorneys representing drivers, the CFPB study documented an array of unfavorable agreements of owner-operator truck financing products and their impact on driver earnings. Some of the findings, which were not limited to trucker agreements, included:

• Because debts are inextricably linked to a worker’s employment, the worker’s ability to repay the debt is controlled by the issuer of the debt itself.

• Employers may be preventing workers from fully understanding the risks, costs, terms and conditions to which they are agreeing.

• Workers may be entirely unaware they have agreed to take on debt to secure their job.

• Workers may feel that they are powerless to review or negotiate the agreements before accepting a job, especially workers with limited experience in a new occupation and workers who are financially vulnerable.

• Employers may misrepresent the value and nature of the employer-driven debt, work conditions or the earnings of the prospective jobs.

• Employers may restrict workers from leaving their jobs because of the high cost of repaying financial costs related to debt.


“We looked across a wide range of industries,” said Emma Oppenheim, a senior fellow in charge of worker initiatives at CFPB. “We heard stories ranging from nursing to airline pilots to pet groomers. But one occupation we heard a lot about finance inquiries was trucking.

“Given that we had learned about trucking in the course of this study, and given that we stayed on the task force as advisory members, we were invited to present broadly on the findings of the report, and specifically what we heard about the trucking industry.”

Oppenheim added, “We heard everything from lower earnings to damaged credit scores to even some stories of folks taking on additional obligations in order to repay their employers.”

FMCSA Administrator Robin Hutcheson told task


force members at their first meeting in July: “Our goal is to improve the overall quality of life for drivers so that they’ll stay in the industry. Experienced drivers are our safest drivers, and we want to eliminate the triggers that might push them out of the industry.”

Jay Grimes, director of federal affairs at the Owner-Operator Independent Drivers Association, said that his group has long pushed for the agency to address predatory lease-purchase agreements.

“The consensus of the task force thus far has indicated that these deceptive types of contracts have no beneficial role in trucking,” Grimes said. “The presentation from CFPB acknowledged there are serious problems with a business issuing debt and also controlling the worker’s ability to repay the debt.

“The task force will be seeking additional data on lease purchase agreements and will be considering potential qualifying criteria for lease purchase agreements.”


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