Editor’s Note: The following is a letter sent to Recreation Vehicle Dealers Association (RVDA) members concerning action by the Consumer Financial Protection Bureau (CFPB) on dealer-assisted financing.
Twenty-two U.S. Senators — 11 Republicans and 11 Democrats — are asking the Consumer Financial Protection Bureau (CFPB) for greater transparency to justify its effort to eliminate motor vehicle dealers’ ability to discount a customer’s loan interest rate. This is a potentially significant development toward CFPB transparency since a Senate bipartisan letter signals to the CFPB that this is not a partisan issue, and emphasizes the need for greater clarity in its decision making.
The letter, led by Sens. Rob Portman (R-Ohio) and Jeanne Shaheen (D-N.H.), comes after several prior congressional inquiries by House democrats and republicans asking whether the bureau had studied the impact on consumers if the extraordinary competitive benefits of in-dealership financing are eliminated.
RVDA supports efforts by these U.S. Senators and others in Congress for more agency transparency. For more on RVDA’s position on the CFPB guidance click here.
In March, the CFPB — without public comment or formal rulemaking — issued fair lending “compliance guidance” that pushes lenders to eliminate the ability that dealers currently have to “meet or beat” a competitor’s rate, and suggests a flat rate paid to dealers as a preferred solution over the current system of dealer participation.
The CFPB refuses to explain to Congress or the public the need to restructure a highly competitive and efficient marketplace that saves car, truck, and RV buyers enormous amounts of money every year.
The Portman-Shaheen letter follows two separate letters sent to the bureau this spring by Rep. Terri Sewell (D-Ala.) and 12 House Financial Services Committee democrats and former House Financial Services Committee Chair Spencer Bachus (R-Ala.) and 34 House republicans.
The bipartisan group of 22 senators is pressing the CFPB for additional information, because “unfortunately, the bureau has not provided complete responses to several of the questions presented to it by our House colleagues,” according to the letter.
For the full text of the letter, including the full list of senators who support the effort, click here.