Bipartisan House Bill Seeks to Thwart CFPB's Attack on Auto Financing
WASHINGTON - The National Automobile Dealers Association today applauded the continued bipartisan efforts in Congress to rescind a flawed guidance from the Consumer Financial Protection Bureau that would harm consumers by limiting their ability to obtain discounted auto financing.
On Monday evening, April 13, Reps. Frank Guinta (R-N.H.) and Ed Perlmutter (D-Colo.) introduced H.R. 1737, the Reforming CFPB Indirect Auto Financing Guidance Act of 2015 . The legislation would repeal a CFPB bulletin from 2013 that was designed to pressure lending institutions into eliminating the availability of auto financing discounts.
These discounts save consumers millions of dollars every year.
"Consumers have the right to obtain auto financing at discounted rates, and those rights should be protected, not threatened," said NADA President Peter Welch. "There is bipartisan support in Congress to require the CFPB to consider how harmful its guidance could be to consumers, and we applaud Reps. Guinta and Perlmutter for their leadership on this issue."
The CFPB's lack of transparency and accountability has prompted 91 members of Congress to request additional information from the agency on how it arrived at the conclusions it used to justify its original March 2013 guidance, but none of these requests have been completely fulfilled, and many have gone unanswered altogether.
The Reforming CFPB Indirect Auto Financing Guidance Act was initially introduced at the end of the 113th Congress and garnered the support of 149 House Republicans and Democrats.
In addition to rescinding the CFPB's flawed guidance, H.R. 1737 would require the Bureau to follow a transparent process - including providing for a public comment period, consulting with the agencies that share jurisdiction over the indirect auto financing market, and disclosing its testing methodologies - prior to issuing any future guidance related to indirect auto credit.
The CFPB has acknowledged that it did not analyze or estimate the economic impact its guidance would have on consumers. Additionally, while the Bureau's own report showed that its model for measuring fair credit risk is flawed, it has not responded to a major peer-review study by Charles River Associates that found several significant flaws in the Bureau's methodology, which have led to inaccurate, incomplete and unreliable conclusions about pricing disparities in the auto finance market.
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