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From Banking and Finance Law Daily, July 31, 2015

House committee greenlights bill to reverse CFPB auto lending guidance

By Katalina M. Bianco, J.D.

The House Financial Services Committee passed bipartisan legislation that would rescind “flawed” guidance by the Consumer Financial Protection Bureau on indirect auto lending. The Reforming CFPB Indirect Auto Financing Guidance Act of 2015 (H.R.1737) was introduced by Reps. Frank Guinta (R-NH) and Ed Perlmutter (D-Colo), along with 126 co-sponsors. H.R. 1737 passed by a vote of 47-10.

In 2013, the CFPB implemented guidance that Guinta said has “threatened” auto dealers’ flexibility to discount interest rates for consumers and “severely decreased competitiveness in the auto industry market.” The lawmaker charges that the bureau issued the guidance without providing a public comment period.

President of the National Automobile Dealers Association Peter Welch said, “As a matter of principle, consumers have the right to negotiate, the right to seek a better deal, and the right to choose the loan that’s best for them, but the CFPB has been trying to take that right away. When you’re paying $30,000 for a car and stretching to do it, consumers should have every possible financial advantage possible.”

MainStory: TopStory CFPB Loans

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