Consumer groups are speaking out against a Senate measure that would overturn the Consumer Financial Protection Bureau’s auto lending regulation.
According to American Banker, the Senate is expected to vote this week on legislation that would use the Congressional Review Act to repeal the CFPB’s regulation on discriminatory pricing by auto lenders.
The rules were created to protect drivers who use indirect auto loans financed through a dealership, which are backed by banks. In March 2013, the CFPB put limits on loan markups and compensation for dealers on these auto loans, specifically on the basis of race, national origin, or credit score.
But in October 2017, the Government Accountability Office supported Republican Pat Toomey’s position that Congress has the power to eliminate the CFPB’s auto rules.
Sixty-four consumer groups oppose the Senate vote, explaining that Congress should have reviewed the guidance when it was first issued by the CFPB in 2013. Using the Congressional Review Act to repeal the law and would set a “dangerous precedent,” they said.
“We oppose such a vote, as it would contravene the clear intent of the CRA to allow Congress to review and challenge recently finalized agency actions,” the letter stated. “This would set a dangerous precedent that would open the door for Congress to stretch the CRA to challenge a wide variety of settled agency actions that have been in effect for years or decades, particularly ‘guidance documents’ that are not only crucial to protecting workers, consumers, minorities, the environment, and the economy but also to providing regulatory certainty for businesses and the public.”
Two auto-safety related organizations — Consumers for Auto Reliability and Safety and the Center for Auto Safety — were among the groups that signed the letter. Other groups included Center for American Progress, the Center for Responsible Lending and the Consumer Federation of America.
“Using the CRA, rather than regular legislative order, to attack years-old established guidance would be an extraordinary and egregious abuse of normal process — exactly the kind of rigged action on behalf of narrow corporate insiders that so infuriates Americans of all political stripes,” the letter stated.