Published: September 2015

Don’t restrict the CFPB’s oversight of auto financing issues

In the latest effort to restrict the Consumer Financial Protection Bureau’s (CFPB) jurisdiction, legislators target the agency’s regulatory power over the auto financing industry. The “Reforming CFPB Indirect Auto Financing Guidance Act” (H.R. 1737) places unnecessary restrictions on the agency and is designed to hamper the agency’s attempts to bring fairness and transparency to the auto lending market.

The latest attempt to weaken the consumer watchdog could impact consumers looking to buy a car in the future. After a home, a car is often the biggest purchase made by a household. The Consumer Financial Protection Bureau (CFPB) has found discriminatory pricing practices in the auto financing market that cost consumers tens of billions of dollars and have been found to violate fair lending practices through a differential impact on minority purchasers of automobiles. The restrictions in this bill do not exist for any other financial practice. The CFPB should have the ability to use the full range of its regulatory tools to address this problem. Unfortunately, the proposed bill, “Reforming CFPB Indirect Auto Financing Guidance Act” (H.R. 1737), will make it harder for the agency to protect car buyers from biased interest rate markups. The bill creates unnecessary and pointless hurdles for the CFPB when issuing guidance to financial institutions on the laws and regulations governing auto finance.

Consumer Action joins coalition advocates in urging Congress to oppose H.R. 1737. The proposed legislation does not change the fair lending law as it relates to the auto lending market. The steps the CFPB has already taken to protect car buyers from discriminatory lending practices must stand.

Lead Organization

Center for Responsible Lending (CRL)

Other Organizations

Alliance for a Just Society | Americans for Financial Reform | Bucks County Women's Advocacy Coalition | Center for Digital Democracy | Center for Global Policy Solutions | Center for Responsible Lending | Consumer Action | Consumer Federation of the Southeast | Consumers for Auto Reliability and Safety | Consumers Union | Fair Housing Center of the Greater Palm Beaches | The Leadership Conference on Civil and Human Rights | Maryland Consumer Rights Coalition | Missouri Faith Voices | NAACP | National Association of Consumer Advocates | National Consumer Law Center (on behalf of its low-income clients) | National Council of La Raza | National People’s Action | National Urban League | Neighborhood Housing Services of Greater Cleveland | Pennsylvania Council of Churches | Syracuse Habitat for Humanity, Inc. | The Other 98% | U.S. PIRG | Woodstock Institute

More Information

For more information, please visit CRL's website.

Download PDF

Don’t restrict the CFPB’s oversight of auto financing issues   (CoalitionLetterOppose1737AutoDiscrimination9.17.15.pdf)

 
 

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