U.S. Sens. Jerry Moran (R-KS) and Pat Toomey (R-PA) recently announced their sponsorship of a resolution to overturn a rule by the Consumer Financial Protection Bureau (CFPB) that regulates car loans issued at auto dealerships.
The resolution of disapproval (S.J. Res. 57) seeks to overturn a 2013 CFPB rule that prohibited dealers from jacking up rates on certain customers or reducing them for others.
The resolution, offered via the Congressional Review Act (CRA), passed in the Senate this week along party lines.
“An ill-advised Obama-era auto-lending rule issued by the CFPB missed the mark on both process and substance,” Moran said. “This resolution of disapproval provides Congress the opportunity to reverse this overreaching rule to return a sense of stability to the auto marketplace, ultimately providing a path to lower costs for all car purchasers. I encourage my colleagues on both sides of the aisle to support this resolution.”
The Government Accountability Office (GAO) reviewed the CFPB’s guidance last year and concluded that it qualified as a rule under the CRA. As a result, it could be rolled back by simple majority vote in Congress.
“The CFPB, under Richard Cordray, frequently overstepped its authority while snubbing Congress and the public in the process. This auto lending guidance is an example,” Toomey said. “I appreciate the GAO’s decision in this matter and encourage my colleagues to support this CRA resolution.”
Peter Welch, president and CEO of the National Automobile Dealers Association (NADA), said every customer deserves to be treated fairly. “There is no room for discrimination of any kind in auto retailing — period. This is a narrowly tailored resolution that in no way modifies or affects the enforcement of any fair credit laws or regulations. But it does take the important step of ensuring that consumer discounts in auto lending are safeguarded for every consumer.”