Bill Aimed at Rescinding CFPB Loan Guidance
In a bipartisan vote, the House Financial Services Committee sought to turn back an effort by the Consumer Financial Protection Bureau (CFPB) to eliminate dealers’ flexibility to discount the interest rate offered to vehicle buyers.
The Recreation Vehicle Dealers Association (RVDA) reported in its RV Executive Today newsletter that the Bureau Guidance Transparency Act (HR. 4811), introduced by Rep. Marlin Stutzman, R-Ind., rescinds the bureau’s 2013 vehicle finance guidance and injects transparency and safeguards into the guidance-writing process.
RVDA, the National Automobile Dealers Association (NADA), the Recreation Vehicle Industry Association (RVIA), the Alliance of Automobile Manufacturers, the American International Automobile Dealers Association (AIADA), and the American Financial Services Association (AFSA) submitted a letter supporting the Guidance Transparency Act prior to the committee’s vote. For the full text of the letter, click here.
“The CFPB has repeatedly chosen to issue guidance in lieu of following a formal rule making process, unlike their counterparts at other federal agencies,” said a letter to the committee from the Financial Services Roundtable. “Notice and opportunity for public comment are critical in the development of good public policy.” The roundtable is an advocacy organization for the financial services industry.
The Guidance Transparency Act passed the committee on a bipartisan vote of 35 to 24, with Democrats Joyce Beatty (Ohio), Steven Horsford (Nevada), and David Scott (Ga.) supporting the bill.
Though the bill rescinds the 2013 auto finance guidance, the CFPB can reissue it with greater transparency and public review. RVDA and its allies believe the CFPB guidance will increase vehicle financing costs for consumers and limit the credit options available for vehicle loans.