The U.S. Senate Banking Committee is planning to repeal the Consumer Financial Protection Bureau’s (CFPB) indirect auto lending and leveraged lending rules.
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.
“Many people depend on auto financing to pay for the car they need to get to work,” then-CFPB Director Richard Cordray said at the time. “Nonbank auto finance companies extend hundreds of billions of dollars in credit to American consumers, yet they have never been supervised at the federal level. We took action after we uncovered auto-lending discrimination at banks we supervise. Today’s proposal would extend our oversight, allowing us to root out discrimination and ensure consumers are being treated fairly across this market.”
But in October, the Government Accountability Office supported Republican Pat Toomey’s position that Congress has the power to eliminate the CFPB’s auto rules. This week, Toomey confirmed that the senate banking committee was planning to do just that while speaking to community bankers in Washington.
“We need to kill this thing all together,” Toomey said of the CFPB, according to Reuters.
“Cordray is gone. What an enormous improvement,” Toomey said of Richard Cordray, who led the CFPB until he resigned in November.
Mick Mulvaney, who is currently serving as the CFPB's interim director, has recently stated that the agency is “all too powerful.”
And it's been reported that one proposal making the rounds on Capitol Hill would replace the CFPB's single director structure in favor of a bi-partisan board of directors, using other agencies, such as the Securities and Exchange Commission (SEC), as a template.
For his part, Toomey is in line to lead the Senate Banking Committee after the November elections if the current chief, Senator Mike Crapo, resigns and Republicans maintain control of Congress.