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CFPB Bill Passes Committee | DrivingSales News

Regulating The Regulator: CFPB Bill Moves Forward

July 30, 2015 0 Comments

On July 29, the House Committee on Financial Services passed H.R. 1737, the Reforming CFPB Indirect Auto Financing Guidance Act of 2015. This bill is meant to make the CFPB more accountable for their sweeping regulatory actions and rescind what one legislator feels is flawed guidance. Bill co-sponsor New Hampshire Rep. Frank Guinta issued a statement about the bill on his website. In a statement, Guinta said, “In 2013, the CFPB implemented guidance which has threatened auto dealers flexibility to discount interest rates for consumers and severely decreased competitiveness in the auto industry market.”

That 2013 guidance was a bulletin addressed to auto lenders. The concern expressed by the CFPB in the guidance was that auto lenders would allow dealers to make more money on auto financing than what they believe to be fair by implementing higher interest rates. The CFPB presented the information in the form of suggestions for lenders. H.R. 1737 would eliminate this guidance from the CFPB and put guidelines in place. According to the text of H.R. 1737 the CFPB would be required to:

-Provide for a public notice and comment period before issuing the guidance in final form

– Make available to the public, including on the website of the Bureau, all studies, data, methodologies, analyses, and other information relied on by the Bureau in preparing such guidance;

– Redact any information that is exempt from disclosure under the Freedom of Information Act

– Consult with the Board of Governors of the Federal Reserve System, the Federal Trade Commission, and the Department of Justice

– Conduct a study on the costs and impacts of such guidance to consumers and women-owned, minority-owned, and small businesses

Looking at this issue from a dealer perspective was Peter Welch, President of NADA. In a press release, Welch said, “The CFPB’s policy of eliminating the ability of a consumer to get a discounted auto loan will restrict access to credit and hurt all consumers.”

The CFPB has made headlines by trying to expand their regulatory reach over dealers by going after auto lenders. Their methodology, which they use to hand out millions in fines has been heavily disputed. Do you think that this bill in necessary to regulate this finance regulator and what other actions should congress take to keep would-be dealership regulations inline?

About the Author:

The DrivingSales News team is dedicated to breaking the relevant and the tough stories affecting car dealers. Have questions for DrivingSales News? Reach the team at news@drivingsales.com.

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