Bipartisan Repeal of CFPB Guidance on Auto Lending Passes Key Committee
Dealers urged to build co-sponsors on the Bureau Guidance Transparency Act (H.R. 4811)
In a rare show of bipartisan cooperation, the House Financial Services Committee sought to turn back an effort by the Consumer Financial Protection Bureau (CFPB) to eliminate dealers' flexibility to discount the interest rate offered to car and truck buyers.
The National Automobile Dealers Association (NADA), a vocal advocate for the legislation, applauded the committee's action. H.R. 4811, introduced by Rep. Marlin Stutzman, R-Ind., rescinds the bureau's 2013 auto finance guidance and injects transparency and safeguards into the guidance-writing process.
“If the CFPB had the benefit of the public's perspective before issuing its auto lending guidance, it would have learned that its changes would likely hike car buyers' monthly payments and limit access to credit, especially for the marginally creditworthy,” said Ivette Rivera, NADA's vice president of Legislative Affairs.
“The CFPB has repeatedly chosen to issue guidance in lieu of following a formal rule making process unlike their counterparts at other federal agencies. Notice and opportunity for public comment are critical in the development of good public policy,” the Financial Services Roundtable said in a letter to the committee prior to the vote.
The Guidance Transparency Act bill passed the committee on a bipartisan vote of 35 to 24 with Democratic Reps. Joyce Beatty (Ohio), Steven Horsford (Nev.) and David Scott (Ga.) supporting the bill.
Though the bill rescinds the 2013 auto finance guidance, the CFPB can reissue it but only with greater transparency and public review.
Joining NADA, the Alliance of Automobile Manufacturers, the American International Automobile Dealers Association (AIADA), American Financial Services Association (AFSA), Recreation Vehicle Industry Association (RVIA), and the Recreation Vehicle Dealers Association (RVDA) sent a letter of support to the committee for the Guidance Transparency Act prior to the vote.
Rivera called on dealers to build support for H.R. 4811.
“Dealers are strongly urged to call their House members to ask them to cosponsor the Guidance Transparency Act (H.R. 4811). Strong bipartisan support is critical for the next step in the process, which is a vote by the full House,” Rivera said.
Source: NADA Legislative Affairs
Editor's note: Dealers are urged to call their Representative to ask them to co-sponsor H.R. 4811, the Guidance Transparency Act. Congress can be reached through the Capitol Switchboard at 202-225-3121. To see how the committee members voted click here. For more information, including an issue brief, visit: www.NADA.org/cfpb.
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