House Vote to Stop CFPB Auto Loan Rule Wins CEI Praise
Today, the House of Representatives passed a resolution to stop a Consumer Financial Protection Bureau (CFPB) rule aimed at curtailing certain auto loan practices. The House, under the auspices of the Congressional Review Act, followed the Senate’s lead in using a resolution of disapproval to end the Obama-era policy. Competitive Enterprise Institute financial policy expert Daniel Press praised House lawmakers who voted to end the ill-founded policy.
Today’s Congressional action is an important check on a rogue federal regulator. The House vote on S.J. Res. 57 stopping the Consumer Financial Protection Bureau’s auto lending guidance will help lift the fear of baseless persecution for auto lenders and dealers and lead to easier access to credit for all consumers.
The trouble started back in 2013 when the CFPB decided to regulate an industry that Congress had deliberately put out of reach: auto dealers. The Bureau used a controversial legal doctrine and half-baked statistical methodology to accuse four major auto lending companies of racial discrimination. Yet subsequent revelations, including internal CFPB emails and industry studies, show that the Bureau’s claims were extremely dubious, at best. Nonetheless, the four companies targeted by the CFPB were bullied into costly settlements. Today’s vote helps right that wrong.
In the long run, the CFPB must take steps to reform the way that it enforces anti-discrimination laws and put an end to lawless persecution. This includes rescinding regulatory guidance that relies on controversial “disparate impact” standards to determine whether consumers faced discrimination.
The measure now heads to the White House to be signed by President Trump.
Related analysis: Congress Should Axe Backdoor Auto Finance Rule