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Call To Action For Today’s Vote: Dealers Urge House Members to Vote ‘Yes’ on H.R. 1737
Wall Street Journal Editorial: Democrats vs. Bureaucrats
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Call To Action For Today’s Vote: Dealers Urge House Members to Vote ‘Yes’ on H.R. 1737

Today, the U.S. House of Representatives is expected to vote on H.R. 1737, an NADA-backed bipartisan bill that would repeal the flawed auto lending guidance issued by the Consumer Financial Protection Bureau.

NADA is urging its member dealers and dealer association executives across the country to call their House members for a “Yes” vote on H.R. 1737, which preserves the ability of dealers to offer rate discounts on auto loans to their customers. To contact your House member, call 202.225.3121. To find your Member of Congress, visit www.house.gov/representatives/find.

  • The Obama Administration has come out strongly opposed to H.R. 1737 and transparency at the CFPB regarding auto financing.
  • Misinformed advocacy organizations are circulating false accusations and inflammatory statements regarding H.R. 1737 and dealer-assisted financing.

H.R. 1737, sponsored by Reps. Frank Guinta (R-N.H.) and Ed Perlmutter (D-Colo.) also requires government transparency, cost estimates for consumers and consultation with other government agencies vested with regulatory authority and allows the CFPB to re-issue new guidance with transparency and public participation. The House Financial Services Committee passed the measure by a bipartisan vote of 47-10 (34 Republicans and 13 Democrats) on July 29.  The bill has 167 cosponsors (102 Republicans and 65 Democrats).
 
For more information, visit www.nada.org/cfpb or contact NADA’s Legislative Affairs office at 202.547.5500 or legislative@nada.org.
Source: NADA

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Wall Street Journal Editorial: Democrats vs. Bureaucrats

A bipartisan plan to stop the consumer bureau’s war on car dealers.

On Wednesday the House is expected to vote down the Consumer Financial Protection Bureau’s extralegal campaign against the nation’s auto dealers. This is an important moment. Even Democrats are beginning to push back against the regulatory agenda crafted by President Obama and Massachusetts Senator Elizabeth Warren. Let’s hope the dissident donkeys survive the experience.

The consumer bureau has been forcing settlements on banks that provide financing via car dealers by claiming the dealers are discriminating with higher rates against minority borrowers. The bureau’s standard procedure is not to offer evidence of bias. Instead, the regulators guess the ethnicity of borrowers based on their last names and where they live, and then demand cash payments if the people they guess are black or hispanic seem to be paying higher rates than the people they guess are white. Every time we write about this policy we have to remind ourselves we work for the Journal and not the Onion.

The bureau no doubt enjoyed the headlines when it persuaded Ally Bank to fork over $80 million in damages (and $18 million in penalties) in December 2013. But once Ally put the $80 million for consumers into escrow in January 2014, this created something of a challenge for the bureau. Up to that point the regulators hadn’t had to present actual victims. What if many of the borrowers who had allegedly suffered were white? What if an honest accounting proved no one had been victimized?

Now, almost two years after Ally provided the money, it’s not clear that the alleged victims—if they exist—have been made whole. When we asked the bureau on Tuesday whether all the checks had gone out, a spokesman referred us to a message on the website of the settlement administrator. It helpfully tells borrowers: “Please be patient. It may take several months to receive and review any forms received. We anticipate payments to be issued later this year or early next year.”

According to the Journal, the government has been sending out letters lately to borrowers it is pretty sure are minorities, informing them of their good fortune but also asking them to write back if they aren’t minorities. We’re not sure the honor system will work here. But if lots of white people do turn down the windfall, all that will prove is that the discrimination claims were bogus in the first place.

At the heart of the bureau’s outrageous regulatory campaign is its March 2013 “bulletin” that effectively codified its policy against dealer discretion in setting interest rates. This Beltway diktat never went through the normal rule-making process.

But on Wednesday a bipartisan bill with 65 Democratic co-sponsors will come to the House floor. The measure would knock down this informal guidance and instruct the bureau to allow public comment and to publish its data and analysis online before issuing new rules on auto financing.

It would also require the bureau to study the costs of such a rule on various affected parties. Imagine that. As for the regulators, they’ve done enough imagining about this market. Let’s hope next time they just stick to the facts.
Source: The Wall Street Journal
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Quotable
“Every dealer in America should call their member of Congress today and urge them to save dealer-assisted financing.”

    -- NADA President Peter Welch encouraging new-car dealers to reach out to their Representative to support H.R. 1737, Nov. 18

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